Private ruling: Capital gains tax - main residence
Published: June 2012
Ruling period: Year ended 30 June 2012.
Date scheme commenced: 1 July 2011.

Ruling: Q1: Is property A your main residence? | A1: Yes. | Q2: Will any capital gain or loss made on the sale of property A be disregarded? | A2: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 104-10 | Income Tax Assessment Act 1997 - Section 118-115 | Income Tax Assessment Act 1997 - Section 118-145 Reasons for decision | Capital gains tax: | Capital gains tax (CGT) is the tax you pay on certain gains you make it is not a separate tax and any capital gain that you make is included in your assessable income and taxed at your marginal tax rates. | You make a capital gain or capital loss, if and only if, a CGT event happens to a CGT asset that you own. The most common event, CGT event A1, happens if you dispose of an asset. The sale of a property constitutes CGT event A1. | You make a capital gain if your capital proceeds are more than the assets cost base. You make a capital loss if your capital proceeds are less than the assets reduced cost base. | Main residence: | You can generally claim the main residence exemption to ignore a capital gain or capital loss from a CGT event that happens to your home. To get the exemption, the property must have a dwelling on it and you must have lived in the dwelling. | Generally, a dwelling is considered to be your main residence if: | (a) you and your family live in it | (b) your personal belongings are in it | (c) it is the address your mail is delivered to | (d) it is your address on the electoral roll, and | (e) services are connected (for example, telephone, gas or electricity). | The main residence exemption is not based on one factor alone, and the weight given to each factor may vary depending on individual circumstances. The length of time you stay there and your intention in occupying it may also be relevant. | In this case, property A is considered your main residence. For the periods of time you were absent from property A, you continued to treat the property as your main residence. Therefore, any capital gain or loss made on the sale of property A will be disregarded.


Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You and your sibling purchased property A. | You owned 50% share in property A and your sibling the remaining 50% share. | You purchased your siblings 50% share in property A. From this date you now own 100% of property A. | Prior to owning property A you owned a 50% share in property B. | You transferred your 50% share in property B to your sibling. | You have not owned any other property apart from property A since transferring your 50% ownership in property B to your sibling. | You and your sibling moved between and lived together in either property A or B. | For convenience your mail and electoral registration was property B as significantly more time was spent at this property. | You lived in property A periodically during the year. | Whenever you were not living in property A it remained vacant. Property A was at no time used to earn rental income. | During the periods when property A was vacant, you continued to treat property A as your main residence during those times. | Property A is split over two separate titles. | One title contains the dwelling and the second title consists of gardens that form part of the amenity of the house. | Property A has been used for private purposes only.