If we rent out our old home when we move into a new home, will we be liable for capital gains tax when we sell the old home?

Q.

We intended to sell our family home to partly fund a new house we have built and moved into. We now think it may be best to rent out our original house and sell when the market has picked up. Will we be liable for any capital gains tax when we sell?

You cannot have two principal places of residence at the same time, but you do not have to elect which property you will claim as your residence immediately. You can be absent from the original property for up to six years if you don't claim any other property as your residence, but if you do decide to treat the new property as your residence you will be liable for CGT only on the difference in value between its value when you moved out and the net sales price. Make sure you talk to your Accountant before you sign any sales contracts.