Q.

I have heard a few people mention that once you have lived in your principal place of residence for seven consecutive years the property becomes exempt from capital gains tax and you can rent it out. Can you please clarify whether this is true?

Unfortunately this is a half truth. Your own home is always free of capital gains tax but as a concession to those who are required to live elsewhere there is a provision in the Tax Act that allows you to be absent from your principal residence for up to six years without losing the CGT exemption provided you do not claim any other property as your principal residence in that time. Therefore, it would be possible to move out of your house and rent it out for a period as long as you stayed within the six year timeframe.