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Edited version of private advice
Authorisation Number: 1052295013782
Date of advice: 22 August 2024
Ruling
Subject: Main residence exemption - absence choice
Question 1
Will the property qualify as your main residence?
Answer
Yes. The property will qualify as a main residence based on your circumstances.
Question 2
Will the property be your main residence beginning from XX XXXX 20YY?
Answer
Yes. As you will establish the property as your main residence as soon as practicable to do so, the dwelling will be treated as your main residence from the date which you acquired your ownership interest in the property.
Question 3
Are you able to make an absence choice for your property under section 118-145 of the Income Tax Assessment Act 1997?
Answer
Yes. You may treat the property as a main residence for up to 6 years if you use it to produce income, such as rent (sometimes called the 6-year rule).
This ruling applies for the following period:
Year ended XX XXXX 20YY
The scheme commenced on:
XX XXXX 20YY
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
You and your family currently live with your parents to assist with the care of your child.
On XX XXXX 20YY, you and your spouse exchanged contracts of sale to purchase the property as joint tenants.
The size of the land on which the dwelling stands is lesser than 2 hectares.
You and your family will move all personal and household items into the property.
You will have utilities such as gas and electricity connected to the property.
You will have your mail directed to the property.
You will change your address on the Australian Electoral Commission roll to the property.
The property will not produce assessable income while you are living in it.
Assumptions
Settlement will occur on XX XXXX 20YY.
You and your family will move into the property on or around the settlement date and commence living in the property.
You will move in with your parents on or after XX XXXX 20YY to assist with caring of a newborn child.
You will make an absence choice and continue treating the property as your main residence for a maximum period of 6 years if the property is being rented.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 118-110
Income Tax Assessment Act 1997 Section 118-145
Income Tax Assessment Act 1997 Section 118-185