• Is the dwelling your main residence?

    Why does it matter?

    In general, your main residence (your home) is exempt from capital gains tax (CGT).

    What factors apply?

    The following factors may be relevant in working out whether a dwelling is your main residence:

    • the length of time you live there – there is no minimum time a person has to live in a home before it is considered to be their main residence
    • whether you and your family lives there
    • whether you have moved your personal belongings into the home
    • the address to which your mail is delivered
    • your address on the electoral roll
    • the connection of services (for example, phone, gas or electricity)
    • your intention in occupying the dwelling.

    A mere intention to construct or occupy a dwelling as your main residence – without actually doing so – is not sufficient to obtain the exemption.

    What is a dwelling?

    A dwelling is anything that is used wholly or mainly for residential accommodation. Examples of a dwelling are:

    • a home or cottage
    • an apartment or flat
    • a strata title unit
    • a unit in a retirement village
    • a caravan, houseboat or other mobile home.

    Main residence for only part of the time you owned it

    If a CGT event happens to a dwelling you acquired on or after 20 September 1985, and that dwelling was not your main residence for the whole time you owned it, you get only a partial exemption.

    If a dwelling was not your main residence for the whole time you owned it, some special rules may entitle you to a full exemption or to extend the partial exemption you would otherwise obtain. These rules apply to land or a dwelling if:

    Calculating a partial exemption

    The part of the capital gain that is taxable is calculated as follows:

    Total capital gain made
    from the CGT event


    number of days in your ownership period
    when the dwelling was not your main residence
    total number of days in your ownership period



    Main residence for part of the ownership period

    Andrew bought a house on one hectare of land under a contract that was settled on 1 July 1990 and moved in immediately. On 1 July 1993, he moved out and began to rent out the house. He did not choose to treat the house as his main residence for the period after he moved out, although he could have done this under the continuing main residence status after dwelling ceases to be your main residence rule.

    End of example

    Note: The home first used to produce income rule does not apply. This is because Andrew used the home to produce income before 21 August 1996.

    A contract for the sale of the house was signed on 1 July 2015 and settled on 31 August 2015 and Andrew made a capital gain of $100,000. As he is entitled to a partial exemption, Andrew's taxable capital gain is as follows:






    Andrew can choose to use the discount method or the indexation method to calculate his capital gain. This is because Andrew entered into the contract to acquire the house before 11.45am (by legal time in the ACT) on 21 September 1999 but the CGT event occurred after this date, and he had owned the house for at least 12 months.

    End of example

    Work it out:

    Calculate the percentage of your property which is exempt from capital gains tax with our Capital gains tax property exemption tool.

    See also:

    For help applying this to your own situation, phone us on 13 28 61.

      Last modified: 31 Oct 2016QC 17184