We are considering selling our investment property so that we can free up some cash. We lived in the property for seven years and have leased it out for the last four years. If we sell it now, do we have to pay full CGT or will our years in residence at the property allow for a pro rata reduction?
A.
Talk to your accountant before you sign the contracts but basically your assumptions are correct. You should pay CGT on only 50% of 4/11ths of any gain. If you do not own any other principal residence ask your accountant about the six year rule.
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