Renting out part of your home could trigger a capital gains tax bill
In the first of a two-part series, Matt Heron examines how renting part of your main residence can affect your capital gains tax exemption and why keeping the right records is essential.
Converting an unused garage or adding a granny flat can generate rental income, but it may also expose part of a family home to capital gains tax when it is sold. (Image source: Shutterstock.com and API Magazine)
One of the great advantages of owning your own home in Australia is that any increase in value is generally exempt from capital gains tax while the property qualifies as your main residence.
For many homeowners this means they give little thought to CGT. They live in the property, pay the mortgage, council rates, insurance and maintenance costs and eventually expect to sell without paying tax on the gain.
That can change when you start making mon…
