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Edited version of private advice
Authorisation Number: 1052356487804
Date of advice: 6 February 2025
Ruling
Subject: CGT - main residence exemption
Question 1
Are you entitled to a Main Residence Exemption (MRE) on Property A in the State A from the purchase date to the date of sale under section 118-140 of the income Tax Assessment Act 1997 (ITAA 1997)?
Answer 1
Yes.
Where a taxpayer changes main residence, section 118-140 of the ITAA 1997 allows for both the existing and replacement residences to be treated as the taxpayer's main residence for a period of 6 months. The Commissioner has no discretion under the tax law to extend this 6-month period.
This ruling applies for the following period:
Year ending XX XXXX 20XX
The scheme commenced on:
XX XXXX 20XX
Relevant facts and circumstances
XX XXXXX 20XX, you purchased property in State A, Property A.
XX XXXXX 20XX, your property purchase settled.
Your purchase price for this property was $XXX,XXX.
Early 20XX, you relocated to State B.
XX XXXXX 20XX you entered a contract to purchase property in State B, Property B.
XX XXXXX 20XX, your property purchase in State B settled.
The purchase price of this property was $X, XXX, XXX.
Due to housing market conditions at the time of the sale of the Property A, the actual selling of the property was delayed.
The property was unique, being located on XXX, limiting its appeal to a niche group of buyers.
You used Property A as your principal place of residence from the time of purchase in XXXXX 20XX, until you relocated to State B in early 20XX.
Circumstances beyond your control, such as market conditions for niche properties contributed to the delay in the sale.
You always intended to sell Property A.
XX XXXXX 20XX, you listed Property A with an Agent for Sale, taking reasonable steps to sell the property.
XX XXXXX 20XX, you entered a contract of sale for Property A.
XX XXXXX 20XX, the property sale settled in the State A.
The property sold for $X, XXX, XXX.
On XX XXXXX 20XX, an inventory condition report was provided from the movers, which confirms move from State A to State B.
On XX XXXXX 20XX, a payslip issued from Company A for Client A.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-140