My sister-in-law and her husband bought a holiday unit in 1996 which has never been rented. They sold their PPOR and moved into their holiday unit permanently twelve months ago, bought a house nearby to move into. It needed major renovation which has been planned, drawn up, certified and quoted and the renovation will start in a couple of weeks. They will hopefully move into their renovated house before Christmas this year. They said today they understand they will pay capital gains tax on the holiday unit and that this rule had changed recently (is this right?). I've never thought about capital gains tax on holiday houses so couldn't answer their questions and said I'd ask here. Does this work the same way as capital gains tax on a rental house? They asked me if there is a way they can minimise the tax? I told them we had prepaid what we could to minimise the capital gains tax on a recently sold rental house, but if their unit has never been rented, do they just pay tax on the difference between the sale price and the purchase price? They've tiled the floors, put up new curtains etc, but no major work like kitchens and bathrooms. Would they halve the gain due to holding more than twelve months and then halve the remaining gain between themselves and add it to their income (which is probably only from shares and the pension)? He is retired and has accessed his super (age 72) and she is aged 62 but still has super AFAIK. Could she put $35K into her super so she is paying tax at 15% on that portion? Neither of them is employed.