Private ruling: CGT - main residence exemption for vacant land
Date of advice: 10 August 2021
Published: October 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim the main residence exemption on the sale of vacant land due to the destruction of the house on your property? | A1: Yes. You are entitled to the full main residence exemption. The effect of making the absence choice is that the property continues to be your main residence for capital gains purposes from when you moved out of it until you sold it. As a result, you are able to treat your vacant land as if the dwelling had not been destroyed and were your main residence. Further information about your home and land after a disaster can be found by searching 'QC 50171' on ato.gov.au

Relevant facts and circumstances: You purchased the property in XX. You are the sole owner of the property. You moved into the property as soon as practical and it was your main residence for XX months. The land adjacent to the house was less than two hectares. Due to relocating for employment, the property was rented out to tenants for XX years. You have elected to use the absence choice to treat your house as your main residence for the whole period it was rented out. A house fire burnt down the property to an extent it was not lawfully occupiable. The property had asbestos and hazardous material removed XXX months after. The property was demolished XX years after the house fire. The vacant land was listed for sale X year and XXX months later with a real estate agent. You entered into a contract with a potential purchaser. However, the contract of sale was cancelled approximately XX years and XXX months later. The purchaser requested a discount on the sale price and requested to purchase the rear end of the vacant land. The vacant land was subdivided into two lots (Lot 1 and Lot 2). You have an intention to sell Lot 1 and retain Lot 2 to build another property to treat as your main residence. Lot 1 entered into a contract of sale in XX and settlement occurred in XX. You did not have another main residence for the whole period from when you purchased the property until you sold Lot 1.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-110 | Income Tax Assessment Act 1997 Section 118-145 | Income Tax Assessment Act 1997 Section 118-160


This ruling applies for the following period: