Your home is exempt. Your paddocks probably aren't.

Australia caps the main residence exemption at 2 hectares. If you're selling a house on acreage, most of your land sits outside it — and how you split the property between the exempt part and the rest is very often the single most valuable decision in the whole sale.

Australia only  This is the one page on the site built around a specific country's rules. Everything else is country-agnostic.

The property

acres
That's —. The exemption covers 2 hectares, and you choose which 2 — but they must include the land under the house.

What you paid

$
$
Stamp duty, conveyancing, building reports. These add to your cost base and reduce the gain.
$
Sheds, fencing, a new dam, an extension. Repairs and maintenance don't count — improvements do.

What you're selling for

$
$
Agent commission, marketing, legal.

The valuation — this is the important one

% of total
A valuer's estimate of what the dwelling, gardens, sheds, driveway and services are worth as a share of the whole property. Leave it blank-ish if you don't know — but read the result below before you decide it doesn't matter.

Your situation

yrs
%
Including the Medicare levy. A large gain can push you into a higher bracket for that year, so check where the gain lands you rather than where you normally sit.
×
The gain is split between you, and each owner has their own concessions and thresholds.

What a valuation could be worth to you

The ATO accepts two ways of splitting the property. You don't get to pick freely — the valuation method needs the 2 hectares to be capable of separate valuation — but where it applies, the difference is rarely small.

Split by area Split by valuation

How the numbers are built

What could change this — every one of these matters

Tick anything that applies. None of it is calculated; the point is to show you which questions actually decide your answer.

Take this to your accountant

A summary of your figures and the questions worth asking. Print it, or copy it into an email.

Making sense of this one

Most people selling acreage assume the family home exemption covers the lot. It doesn't, and the gap is expensive.

The rule in one line

The main residence exemption covers your dwelling plus adjacent land used primarily for private purposes, up to a maximum of 2 hectares — about 4.94 acres. You choose which 2 hectares, and they must include the land the house sits on. Everything beyond that is an ordinary CGT asset.

So on a 60-acre block, roughly 92% of the land area falls outside the exemption. But land area and land value are very different things, and that distinction is where the money is.

An example: Ken and Robyn, selling 60 acres

They bought in 2005 for $500,000 with $25,000 of buying costs, and they're selling for $1,800,000 with $45,000 of selling costs. Their total gain is $1,230,000.

Split by area, 91.8% of the property is outside the exemption, so $1,128,600 of the gain is taxable. After the 50% discount that's $564,300 added to their taxable income.

But a valuer says the house, garden, sheds, driveway and the best 2 hectares are worth $1,150,000 — 64% of the sale price — because that's where the buildings and services are. Split by valuation, only 36% of the gain is taxable: $444,000, or $222,000 after the discount.

The two methods differ by $342,300 of taxable income. At a 39% marginal rate that's around $133,000 of tax, turning entirely on whether they commissioned a valuation before settlement. A rural valuation costs a fraction of that.

Why the valuation method usually wins

Because value isn't spread evenly across a rural block. The house, the shedding, the power and water connections, the driveway and the established garden all sit within the first couple of hectares. The back paddocks are worth real money per hectare, but far less per hectare than the bit with the house on it.

The ATO's position is that where your selected 2 hectares can be separately valued, you apportion on that basis. Where it can't, you fall back to area. So the practical question is whether you get a valuer to do the work — ideally before you sell, while the property is still intact and everything is there to see.

What this page deliberately does not do

It does not tell you what tax you will pay. It cannot: the answer depends on whether the land was farmed, whether any of it produced income, whether you'll subdivide, your residency, and several concessions that can take a six-figure gain down to nothing. Those are in the checklist above, each with a link to the ATO page that governs it.

What it does is put a number on the one decision most people don't know they're making, and give you a sensible list of questions for someone qualified to answer them.

General information only — not tax advice, and not a substitute for it. This page estimates how a property might be apportioned between the exempt and non-exempt portions under Australia's main residence exemption. It does not calculate your tax. It ignores the small business CGT concessions, partial exemptions for income-producing use, the market-value substitution rule, subdivision, GST, residency, deceased estates, state land tax and stamp duty, and any interaction with the Age Pension — every one of which can change the result substantially, and several of which can eliminate the tax entirely. The 50% CGT discount shown reflects current law; the 2026–27 Budget proposes replacing it from 1 July 2027 with indexation and a 30% minimum tax, and those Bills had not passed when this page was written. Get advice from a registered tax agent before acting.