You can generally claim the main residence exemption from Capital Gains Tax (CGT) for your home.
To get the exemption, the property must have a dwelling on it and you must have lived in it. You’re not entitled to the exemption for a vacant block.
Generally, a dwelling is considered to be your main residence if:
- you and your family live in it
- your personal belongings are in it
- it is the address your mail is delivered to
- it is your address on the electoral roll, and
- services such as phone, gas and power are connected.
The main residence exemption is not based on one factor alone, and the weight given to each varies depending on individual circumstances. The length of time you stay there and your intention in occupying it may also be relevant.
It may be possible to have your home in a trust or company as the test is based on criteria above.
A number of taxpayers have lost cases in court and had to pay CGT because they didn’t move into their home early enough. The Australian Taxation Office (ATO) are tracking sales now through their new computer and support from State Governments.
Capital gains which was based on honesty is now based on evidence.
Call in your local TaxAssist Accountants branch to see an accountant for more specific details.
Date published 20 Oct 2016 | Last updated 31 Jan 2025
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
