I’ve been renting my house for two years. Will I have to pay tax when I sell?

November 11, 2026 — 4:01am

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I am 72, single and planning to sell my former home, which I bought in 2007 for $860,000 following my divorce. It was my principal residence until two years ago, when I moved out and rented it. The property is going to auction in February, and the agent estimates it is now worth $1.5 million. I intend to move permanently into my beach house and give some of the sale proceeds to my children.

Will I have to pay capital gains tax because the property has been rented for the past two years? Also, if I contribute about $200,000 of the proceeds to superannuation, will I have to pay the 15 per cent contributions tax, or could it qualify as a downsizer contribution? My current superannuation balance is $1.4 million.

The good news is that the six-year capital gains tax rule allows you to continue treating a former home as your main residence for up to six years after moving out, even if you rent it to tenants. This means that, provided you do not treat another property as your main residence for tax purposes during those two years, you should be able to sell the property without paying capital gains tax.

You could certainly take advantage of the downsizer-contribution provisions, but as you are under 75 and your superannuation balance is below $2.1 million, you could also contribute the $200,000 directly to superannuation as a non-concessional contribution, using the bring-forward provisions if eligible.

No 15 per cent contributions tax applies to non-concessional contributions. This would preserve the downsizer contribution option in case you need to downsize again in the future. There are no upper age limits or total superannuation balance limits on downsizer contributions, although other eligibility conditions apply.

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