How capital gains tax applies

You make a capital gain if you sell a CGT asset, such as a house, and make a profit. Any gain you make is assessable income and you must include that amount in your tax return for the year that you make the gain. The amount of tax you pay on a capital gain depends on a range of factors including when you bought and sold the asset, the cost of the asset, your other taxable income, and how you use the asset.

A capital gain from the sale of your main residence is usually exempt from capital gains tax (CGT). However, if you use your main residence to earn income, for example by renting out a room on a sharing economy platform, you will no longer eligible for the full CGT exemption on that main residence. You will lose a portion of your main residence exemption based on the floor area rented out, and the length of time it was rented.

There are some circumstances where you won't lose the CGT main residence exemption, for example where you move completely out of your main residence to live in another home for a period of time.

If you use a sharing economy platform to rent out all or part of a property that you don't own, CGT doesn't apply to you.

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See also:

• Using your home to produce income
• Your main residence
• Capital gains tax property exemption tool

When renting out a room or your home through the sharing economy, you may have to pay capital gains tax (CGT) when you sell the property.