Private ruling: Main residence exemption
Date of advice: 5 March 2025
Published: 14 April 2025
Ruling period: DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Are you entitled to a partial main residence exemption for the period you resided at the property? | A1: Yes. As you are the legal owner of the dwelling, you will be entitled to a partial exemption for the period the dwelling was your main residence. You calculate the part of your capital gain that is taxable by total capital gain made from the CGT event multiplied by (number of days in your ownership period when the dwelling was not your main residence) divided by total number of days in your ownership period.

Relevant facts and circumstances: In the specified year, the property was acquired by your parent for main residence purposes. On the specified date, your parent transferred one half share of the property for natural love and affection to you and your spouse. In the specified year, your parent signed building contract to demolish the house, subdivide the land, and build X dwellings. On the specified date, a building permit was issued to your parent for the property to commence and finalise construction between the specified dates. On the specified date, the title of the property was split into X titles being the property and property address number X. Both titles were transferred solely into your name. On the specified date, the building contract was terminated due to the company going into liquidation. Further attempts were made to engage a new builder for the construction and this was unsuccessful. The family agreed the only way to process the development was through the owner builder process. In the specified year, construction was completed for the property, your parent resided at the property until the property was sold. Due to separation between you and your spouse you resided at the property between the specified periods and this was your main throughout this time. On the specified date, a contract was signed for the sale of the property with you specified as the vendor. Settlement occurred on the specified date.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-185 Further issues for you to consider | We have limited our private ruling to the questions raised in your application. There may be related issues that you should consider, including: | How the CGT discount works | When you sell or otherwise dispose of an asset, you can reduce your capital gain by X%, if both of the following apply: | • you owned the asset for at least X months | • you are an Australian resident for tax purposes. | This is called the capital gains tax (CGT) discount. | Refer to the ATO website www.ato.gov.au and search "QC 66019" for more information.