Hey here is some reading for you which confirms majority of what people have written.
the Capital gains tax property exemption calculator is pretty good tool to help out its at the bottom of the page


http://www.ato.gov.au/individuals/co...tent/36883.htm

there are examples of each type of case.
helpful hint when using the calcuatlor or just the ATO information - build a time line on some paper.

- Contract Signed date
- Settlement date
- Rented from
- Rented to
- Lived in from
- Sold
etc