Tax with Max: Calculating capital gains on a rebuild

Working out the tax implications of rebuilding a house, making a concessional super contribution, claiming a government pension and more.

Summary: Capital gains are not based on original cost plus improvements in situations where a property ceases to be a main residence, such as when a new one is purchased and the original home is rented out. When the owners move out of their home into a new main residence, a market value of the old property at that point in time is established.

Key take-out: The market value of the old main residence at the time when the owner moves out is compared to the same property’s market value when it is later sold to work out the assessable capital gain.

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