Taxation Determination

TD 92/171

Income tax: capital gains : does the main residence exemption extend to additional land acquired after the time of acquisition of the residence?

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FOI status:

may be releasedFOI number: I 1213449

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue.

[ Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database ( to check its currency and to view the details of all changes.]

1. Yes. The exemption is available provided the following requirements of subsections sections 118-120 and 118-165 of the Income Tax Assessment Act 1997 are satisfied:

the additional land (including the area of land on which the dwelling is built) is adjacent to that on which the dwelling is situated;
the total area of land is not greater than 2 hectares;
the additional land is used primarily for private or domestic purposes in association with the dwelling; and
the CGT event that happens in relation to the additional land also happens in relation to the dwelling (or your ownership interest in it).

Note: The exemption applies whether or not the dwelling is a pre or post-CGT dwelling.

Example: Tom and Mary purchase a home in 1987 and occupy it as their main residence. The home has never been used for income producing purposes.In 1989, they purchase the vacant block of land that adjoins the land on which their dwelling is situated and construct a private swimming pool. The total of the area of adjacent land and the area of the land on which the home is situated is less than 2 hectares. In 2001, they enter into a contract to sell the home with the adjoining block.A full main residence exemption is available.

Commissioner of Taxation

Previously Draft TD 92/D152


ATO references:

ISSN 1038 - 3158

Subject References:
CGT main residence exemption
adjacent land

Legislative References:
ITAA 1997 118-120
ITAA 1997 118-165

TD 9217/1 history
  Date: Version: Change:
  22 October 1992 Original ruling  
  29 November 2006 Original ruling + note Repeal provision note
You are here 21 April 2010 Consolidated ruling Addendum