I have been told that because I don't have a principal place of residence if I wish to sell the investment property I will not incur capital gains tax. Is this correct?

Q.

I live in my parent's home and don't pay any rent or board. I have an investment property which is rented out. Settlement was in June 2005 and it has been rented ever since. I have been told that because I don't have a principal place of residence if I wish to sell the investment property I will not incur capital gains tax. Is this correct? I am looking at selling it later this year. If this is not correct then is there any way I can get away from paying CGT?

You can only claim the private residence exemption if you actually lived in the house. Therefore on the facts provided you would not qualify. Of course if you start to live in it, the CGT can be reduced on a pro rata basis.