Trying to plan the divestment of a rental (house A) and trying to sort out understanding of the capital gains formula. The situation is that I bought a house close to the workplace at the time, fully intending to sell again after about two years and return to living in the long term family home (house B), the Principal Place of Residence (PPR). As things happen, we lived there (house A) for 3 years then rented the place to a family member for the next 14 while we went back to the PPR (house B). Current understanding of the rules is that 14/17ths of the capital gain on house A is subject to taxation, if I sell tomorrow.
The current personal situation is that I want to turn one of the houses into a high end Motor home and travel Aust, two or three months at a time, for a couple of years. If I sell the current PPR (house B), no capital gain, simple. If I move back into the rental, can I re-establish that house as the PPR again and escape Capital Gains on the subsequent sale of that house? Or does the formula always stay as a ratio of time as family home: time as a rental. I have an appointment with the accountant but would like to get some ideas now.