If you make a capital gain when you sell your home, you may not be entitled to the full main residence exemption (that is, part of the gain may be taxable) if you:
acquired the home on or after 20 September 1985
used part of the home to produce income at some time during the period you owned it, and
would be entitled to deduct interest had you incurred it on money borrowed to buy the home. This is known as the interest deductibility test.
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