Taxation Determination

TD 92/171

Income tax: capital gains : does the principal 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.

1. Yes. The exemption is available provided the following requirements of subsections 160ZZQ(3) and 160ZZQ(4) are satisfied:

the additional land 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 additional land is not sold separately from the dwelling.

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


Tom and Mary purchase a home in 1987 and occupy it as their sole or principal residence. The home has never been used for income producing purposes.
In 1989, they purchase the adjoining vacant block of land on which they construct a private swimming pool. The total of the area of additional land and the area of the land on which the home is situated is less than 2 hectares. In 1991, they enter into a contract to sell the home with the adjoining block.
A full principal residence exemption is available.

Commissioner of Taxation

Previously Draft TD 92/D152


ATO references:

ISSN 1038 - 3158

Related Rulings/Determinations:


Subject References:
Principal residence exemption;
adjacent land;
separately acquired land

Legislative References:
ITAA 160ZZQ(3);

TD 92/171 history
  Date: Version: Change:
You are here 22 October 1992 Original ruling  
  29 November 2006 Original ruling + note Repeal provision note
  21 April 2010 Consolidated ruling Addendum