6-Year Rule Non-Resident: What It Means for Property Owners Abroad

When you move out of Australia and stop being a tax resident, the 6-year rule non-resident, a tax provision that lets former residents treat their former home as their main residence for up to six years after leaving. This rule doesn’t apply to everyone—it’s only for people who owned the property before becoming non-residents and didn’t claim another home as their main residence overseas. If you’re an Australian who bought a home, lived in it, then moved abroad, this rule can save you thousands in capital gains tax when you sell.

The capital gains tax, the tax you pay when you sell an asset like property for more than you paid for it is the big reason this rule matters. Normally, once you’re a non-resident, Australia taxes you on gains from selling Australian property. But if you’ve been away for less than six years and didn’t rent it out the whole time, you might still qualify for the main residence exemption. That means no tax on the gain. If you rented it out, you can still use the rule—but only for the time you lived in it, plus up to six years after leaving.

This rule is tied to your residency status property, whether you’re considered an Australian tax resident for income and capital gains purposes. It’s not about where your passport says you live—it’s about where you center your life. If you’ve moved overseas for work, have no ties to Australia, and are paying taxes elsewhere, you’re likely a non-resident. But if you still bank in Australia, visit often, or plan to return, you might still be considered a resident.

Many people get confused thinking the six years reset every time they visit Australia. They don’t. The clock starts ticking the day you leave and stop using the home as your main residence. If you rent it out during that time, you can still claim the exemption—but only up to six years total. After that, any gain from the date you became a non-resident is taxable. And if you bought another home overseas and claimed it as your main residence, you lose the exemption completely.

There’s no form to file to use this rule—you just need to keep good records. Track your move-out date, when you started renting, and how long you lived in the property before leaving. If you sell after six years, you’ll need to calculate the taxable portion. It’s not all or nothing—it’s pro-rated based on time.

Real estate investors who moved overseas and kept their Australian homes often wonder if they’re stuck paying tax on every dollar of profit. The answer isn’t yes. The 6-year rule non-resident gives you breathing room. It’s designed for people who left temporarily—not permanently. It’s not a loophole. It’s a practical exception for life changes.

What you’ll find in the posts below are real cases: people who sold after 5 years and paid nothing, others who rented for 7 years and got hit with a big bill, and the small mistakes that cost people thousands. You’ll see how the rule works with rental income, what happens if you move back, and how it stacks up against other tax rules in Australia. No theory—just what actually happened and what you can do about it.