The answer depends on timing, tax residency, and a few rules that catch people out.

Let’s say you have lived in your home in Brisbane for years. You get a job offer in Singapore and decide to rent the house while you are away. A few years later, you sell it. Will you pay tax on the gain?

The main residence exemption might be available in full if you are still a resident of Australia for tax purposes when you sell, even if you have been living or spending a lot of time overseas. However, being a resident at the time of sale is only one part of the test. The exemption also depends on how the property was used and whether you treated any other property as your main residence during that time.

Since 2019, people who are not residents of Australia when they sell their former home cannot claim the exemption unless a specific life event exception applies. These exceptions are limited and mostly relate to divorce, death, or terminal illness. It does not matter how long they lived there or whether they ever rented it out.

This means the timing of your sale is critical. If you plan to move overseas, it's worth considering whether to sell before you go. If you have already left, you might want to return and re-establish residency before selling, though that is not always practical. You might also simply continue to hold the property until you eventually return.

If you return and become a resident again before selling, you may be able to claim the exemption for the periods when you were a resident, and the home qualified as your main residence. You might be eligible for a partial exemption, based on how long the property was your main residence and not used to produce income.

The six-year rule also lets you treat your former home as your main residence for up to six years after you move out if you do not treat any other property as your main residence during that time, even if you earn rental income. This rule can apply while you are a non-resident, but it only helps if you are a resident again when you sell the property. The exemption is unavailable if you are still a non-resident at the time of sale.

The Tax Office can closely examine these situations and has extensive data-matching capabilities. You should check your residency status, understand the timing rules, and get professional help.

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