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  • When does a property stop being your main residence?

    A property usually stops being your main residence when you stop living in it.

    However, you can choose to continue treating your former home as your main residence for capital gains tax purposes even if you no longer live in it.

    There are a number of factors that indicate whether a property is no longer your main residence:

    • you and your family no longer live in it
    • your personal belongings are not kept in it
    • it is no longer the address your mail is delivered to
    • it is no longer your address on the electoral roll
    • services such as gas and power are no longer connected.

    The weight given to each of these factors depends on individual circumstances. The length of time you are absent from the property, and any intention you have to re-occupy it, may also be relevant.

    Example: property stops being main residence during work posting

    Duc has lived in his house with his family for 5 years. It has been his main residence for the whole period he has owned it.

    Duc accepts a 2-year posting overseas for work. During this period:

    • Duc’s family will travel and live with him overseas
    • Duc cancels his utility connections and places all of his personal belongings in storage
    • he has his mail redirected to his overseas address and updates his address on the electoral roll.

    The house stops being Duc’s main residence for the period of his absence.

    Depending on his other circumstances, he may choose to continue to treat the house as his main residence while he is away.

    End of example

     

    Example: property stops being main residence during extended travel

    Eric and Lorraine have owned their family home for 10 years.

    They have both retired and for the past few years have travelled the country for 3 to 4 months of each year in their caravan.

    When they travel, Eric and Lorraine:

    • take some personal items with them and leave the rest in storage at their home
    • divert their mail to their daughter, who looks after anything urgent
    • notify their utility providers and government agencies of their travel plans and provide an email address for anything that needs their immediate attention
    • turn off the mains gas and water to their house but do not disconnect their utilities accounts
    • leave their mains electricity switched on as they have solar panels, which generate a feed-in credit for them while they are away.

    Eric and Lorraine are away from their home for a significant part of the year. While they are away, they make the caravan their home.

    The house stops being Eric and Lorraine’s main residence for the period of their absence.

    Depending on their other circumstances, they may choose to continue to treat the house as their main residence while they are absent.

    End of example

     

    Example: property does not stop being main residence during holiday

    Rajini bought a unit in which she has lived for 2 years. It has been her main residence for the whole period she has owned it.

    Rajini goes on holiday to Bali for 2 weeks each year over the summer.

    Rajini leaves some of her more personal possessions, such as her jewellery and laptop, with her parents while she is away.

    The unit does not stop being Rajini’s main residence while she is on holiday.

    End of example
    Last modified: 04 Aug 2021QC 66031