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Edited version of private advice
Authorisation Number: 1052138252938
Date of advice: 19 July 2023
Ruling
Subject: CGT - main residence exemption
Question
Are you entitled to a partial main residence exemption under section 118-190 of the Income Tax Assessment Act 1997 in relation to the disposal of the Property?
Answer
Yes. You will need to calculate this on a reasonable basis taking into account your use of the property for both main residence and income producing purposes. Apportioning on the basis of the floor area used for each purpose is appropriate in most cases as set out in paragraph 4 of Taxation Determination TD 1999/66 Income tax: capital gains: what factors should be taken into account in determining the 'amount that is reasonable' in applying subsection 118-190(2) of the Income Tax Assessment Act 1997?
This private ruling applies for the following period:
Year ended XX June 20XX.
The scheme commenced on:
XX July 20XX.
Relevant facts and circumstances
You purchased the Property in December 20XX.
The Property is situated on less than 2 hectares of land.
The Property consisted of 3 levels, the upper level, middle level, and lower level.
The upper level consisted of 4 bedrooms, a main bathroom, an ensuite bathroom and living spaces.
The middle level consisted of a studio apartment with bed, kitchen, living room, bathroom, and laundry.
The lower level consisted of a laundry, storage areas and a garage.
In July 20XX, you made the upper and middle level available for short term rentals through an online leasing company.
The tenants who rented the upper level also had access to the lower level.
You treated the Property as your main residence from date of purchase until the sale of the Property which occurred in November 20XX.
As the Property was your main residence, the middle level and upper level were never available for rent at the same time.
Between 1 July 20XX and November 20XX, you rented the upper level our for 354 days.
Between 1 July 20XX and November 20XX, you rented the middle level out for 1,201 days.
The Property was not used for income producing purposes between the date you purchased it and 1 July 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-190
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