Edited version of private advice

Authorisation Number: 1052336562188

Date of advice: 28 November 2024

Ruling

Subject: Main residence exemption - 6-year rule

Question 1

Are you entitled to a main residence exemption when you sell your property?

Answer 1

Yes.

You can treat the property as your main residence during the time that you leased it out under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997), as this occurred for a period under X years when it ceased to be your main residence. The facts you provided satisfy the conditions under section 118-150 of the ITAA 1997 for the main residence period to be applied from the date that you acquired your ownership in the land. You will be entitled to the full main residence exemption according to section 118-110 of the ITAA 1997 from the time that you acquired the land.

This ruling applies for the following period:

Year ending XX June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

In XX 20XX, you signed a contract to purchase land and construct a dwelling (the property) to become your main residence.

The land is under X hectares.

The construction of the dwelling was delayed due to Covid restrictions.

On XX/XX/20XX the official handover was completed.

On XX/XX/20XX, you moved into the dwelling as your main residence. Your partner moved into the dwelling with you.

You moved all your personal belongings to the property.

You received most of your mail electronically and postal mail was directed to family members.

You did not update the electoral roll to the property's address.

All essential utilities were connected to the property in your name.

From XX/XX/20XX to XX/XX/20XX, you temporarily stayed in another state with your partner for their employment assignment. You stayed in temporary accommodation. The property remained vacant during this time.

In XX 20XX, an unforeseen medical issue with your partner required you both to relocate to another state for family support and treatment.

You decided to lease the property while staying in the other state.

The provided lease agreement on the property was for a XX-month period.

You and your partner intended to move back to the property once your partner's condition stabilised.

You were unemployed while in the other state as you intended to gain employment in the state the property was located when you moved back at the end of the lease.

On X/XX/20XX, your partner accepted temporary employment in another state while waiting for the lease to expire on the property.

From XX/XX/20XX until XX/XX/20XX, your partner accepted an employment contract to work in another state.

You and your partner decided to lease a property in the other state. The provided contract is for a XX-month lease.

In XX 20XX you accepted an employment contract to work in another state for over XX months.

You maintained the property as your main residence.

You have not claimed or resided in any other property as your main residence.

In XX 20XX you made the decision to permanently establish your life in the other state with your partner.

On XX/XX/20XX, you entered into a contract to sell the property. You intend to use the proceeds of the sale to purchase a property in the other state. You intend this to be your new main residence.

Relevant legislative provisions

Income tax Assessment Act 1997 section 118-135

Income tax Assessment Act 1997 section 118-150

Income tax Assessment Act 1997 section 118-110

Income tax Assessment Act 1997 section 118-145