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  • Your main residence

    Your ‘main residence’ (your home) is generally exempt from capital gains tax (CGT). 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.

    If you were not a resident of Australia for tax purposes while you were living in the property, you are unlikely to satisfy the requirements for the main residence exemption.

    If you are a foreign resident when a CGT event happens to your residential property in Australia you may no longer be entitled to claim the main residence exemption. There is a transitional period. To find out more, see Foreign residents and main residence exemption.

    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's the address your mail is delivered to
    • it's your address on the electoral roll,
    • services such as 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.

    You're eligible for a full main residence exemption if the dwelling:

    • has been the home of you, your partner and other dependants for the whole period you've owned it
    • has not been used to produce assessable income – that is, you've not run a business from it, rented it out or flipped it, and
    • is on land of two hectares or less.

    If the full exemption applies your capital gain or loss is disregarded – you don’t pay tax on any capital gain, but nor can you use any capital loss to reduce your assessable income.

    Alternatively, you may be entitled to a partial exemption.

    Find out how the main residence exemption applies when you:

    • move in – a dwelling is considered to be your main residence from the time you acquire it if you move in as soon as practicable after settlement
    • move from one main residence to another – if you acquire a new home before you dispose of your old one, you may be able to treat both dwellings as your main residence for up to six months
    • move out – you can continue treating your old home as your main residence
    • live in a different home to your spouse or children – you need to choose which home will be your main residence
    • use your home to produce income (such as renting it out, running a home business or flipping your home) – you don't get the full main residence exemption and may need to know your home's market value at the time you first used it to produce income
    • build or renovate your home on land you own – you can treat the land as your main residence for up to four years before you move in, provided you move in as soon as practicable after it's finished.

    See also:

    Last modified: 31 May 2018QC 22168