No, the 6-year Capital Gains Tax (CGT) exemption does not apply if you only rent out part of your home—such as a single bedroom—while continuing to live there. In this case, the property remains your main residence, but CGT is calculated on an apportioned basis. For example, if you rent out one-fifth of your property for two years, you may be liable for CGT on one-fifth of the capital gain related to that two-year period when the property is eventually sold.
To qualify for the full 6-year CGT exemption, you must move out and rent out the entire property while treating it as your main residence for tax purposes.
Land Tax:
Generally, no land tax is payable if you’re only renting out part of your principal place of residence (PPOR). The property is still considered your home. However, if you rent out the entire property, it may lose its exemption status and become subject to land tax, depending on the state or territory regulations.
Income Tax Reporting:
Any rental income received—whether from one room or the whole property—must be declared in your tax return. You can also claim a proportion of the related expenses, such as mortgage interest, council rates, insurance, and utilities, based on the area rented out and the period of rental.
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