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  • Your home and land after a disaster

    You generally don't pay capital gains tax (CGT) if you sell the home you live in (under the main residence exemption). However, if you decide to sell your home after it has been rebuilt or dispose of the vacant land, you need to make sure you understand the eligibility criteria for the main residence exemption.

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    Selling your home after rebuilding

    If you rebuild your home after a disaster and then decide to sell it, it will still be classed as your main residence. Your main residence is exempt from capital gains tax (CGT) provided you have both:

    • moved back into the repaired or rebuilt property as soon as practicable after the work was completed
    • lived there for at least three months before selling.

    If you carry on an enterprise and are required to be registered for GST you will need to notify the purchaser if they are required to withhold GST from the purchase price and pay it to the ATO at settlement.

    Example: Moving back in as soon as practicable

    Louis and Yasmine's home was destroyed by a cyclone. They decided to use the insurance payment to rebuild it.

    They rented a house 20 kilometres away with a six-month lease, and a six-month option to renew. They enrolled their child, Marley, in a school close to their rented home.

    After six months their home was still being rebuilt, so they took up the renewal option on their rental house.

    After nine months, their home was complete. However, because Marley was halfway through the final school term and there would be a financial penalty for breaking the lease, the family decided to stay in the rental property until the end of the school term.

    In this circumstance, Louis and Yasmine moved back into their home as soon as practicable after the work had been completed.

    End of example

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    Selling your land without rebuilding

    If your home was destroyed and you sell the vacant land it was built on, you are still eligible for the main residence exemption from CGT.

    See also:

    Last modified: 21 Sep 2020QC 50171