A family member has had two completely different answers from two different people (one was their accountant) on a question they need answers for. The second answer was from someone else who should know, but I cannot recall if it was the ATO or maybe their solicitor. They bought a holiday unit in 1996, used it for weekends and holidays. It has never been rented. They sold their house in Brisbane and moved into the holiday unit a year ago (2014). They bought a house nearby six months ago and it is being renovated and they will move into it in December 2015 and list the holiday house (which they will have lived in for say 18 months). What is the capital gains tax situation on the profit they make on the holiday unit? Assuming they do pay capital gains tax, can they add BC fees, rates, money spent upgrading things in the holiday unit to the cost base? What about interest on the loan used to purchase it? They are retired and I think the income they get comes from shares.