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Renting out Rooms in Your Main Residence and Impact on the 6 Year Absence Rule

Main Residence 6 year absence rule and renting out rooms

Bob decides to rent one room in his main residence to Jane after he moves into the property immediately after purchase.

Bob and Jane continue to live in the property for 4 years and after that Bob decides he will be moving interstate for a few years and will rent out his current property.  Jane will also be finding new premises to rent. 

It was estimated that Bob used 75% of the house as his main residence and the other 25% was rented out to Jane.

After 4 years of being away from the property Bob sells the property.

Now the question that Bob has is whether he can apply the 6 year absence rule to the entire capital gain ?

Unfortunately not.

Bob will be able to apply the main residence absence rules to his 75% but the 25% that was rented out will not be eligible for the main residence absence provisions.

Make sure when applying the main residence absence provisions you also consider whether the property has been rented out in part.

If you are interested read more about the 6 year rule here

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