Private ruling: Main residence exemption - 50% CGT discount
Date of advice: 26 March 2026
Published: 29 June 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you eligible to claim the main residence exemption under section 118-110 of the Income Tax Assessment Act 1997 (ITAA 1997) on the disposal of your property at XXX? | A1: No. | Q2: Are you entitled to the 50% CGT discount on the sale of the property? | A2: Yes.

Relevant facts and circumstances: On DD MM YYYY, you signed a contract to purchase an off the plan apartment (Property A). At that time, you and your spouse did not own any other property and were living in a rental property. On DD MM YYYY, your child was born. At this time, Property A had not been completed, and you purchased an established apartment (property B). You have advised that you intended to live in Property B temporarily, until Property A had been completed. In MM YYYY, Property A was completed. On DD MM YYYY, settlement occurred for Property A. On DD MM YYYY, you moved into Property A. On DD MM YYYY, you moved back into Property B. You have advised that you returned to Property B due to the noise and privacy concerns from the neighbourhood of property A. You have advised that you managed to move your personal belongings by yourself due to the close proximity of the two properties. You did not update your address with your employer. You use your parents' address for your driver's licence. You did not update your address with Medicare. On DD MM YYYY, you signed a contract of sale to dispose of Property A. Settlement occurred on DD MM YYYY. You have provided following documents with the address of property A: • your electoral roll • your electricity bill • water invoice.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 Division 115 | Income Tax Assessment Act 1997 section 118-110

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 104-10 of the ITAA 1997 provides that CGT event A1 happens if you dispose of a CGT asset. Section 118-110 allows you to disregard a capital gain or capital loss you make from a CGT event that happens in relation to a CGT asset that is a dwelling or your ownership interest in it if you are an individual; and the dwelling was your main residence throughout your ownership period; and the interest did not pass to you as a beneficiary in, and you did not acquire it as a trustee of, the estate of a deceased person. Whether a dwelling is your main residence depends on the actions of you and your family. Generally, a dwelling is your main residence if: • You and your family live there • Your personal belongings are moved into the property • The address to which your mail is delivered • It is your address on the electoral roll • Services such as gas and power are connected. The length of time you stay in the dwelling and whether you intend to occupy it as your home may also be relevant. In this sense, your intentions can help to explain your actions or affect the weighting given to certain action over others. However, your intentions are not a substitute for your actions. | Detailed Reasoning - Application to your circumstances: In your case, you purchased Property A as an off the plan apartment and intended to move into it as your main residence once construction was completed. You moved into Property A on DD MM 20YY, soon after the property settled. You had concerns about the noise and your privacy from neighbourhood of Property A. Just over a month later you moved out of the property and moved back into Property B. Although you have stated that you moved into property A and treated it as your main residence; you have not provided sufficient evidence to indicate that you established the property as your main residence. Also, the length of time that you stayed in the property was a relatively short period. Therefore, we do not consider that you established Property A as your main residence. As such, you are not entitled to the main residence exemption. | Detailed Reasoning - Question 2: Are you entitled to the 50% CGT discount on the sale of the property? | Detailed Reasoning - Detailed reasoning: Under division 115 of the ITAA 1997, you can reduce your CGT by 50% if the following requirements are satisfied: • you are an individual, • a capital gain tax event happens to an asset you own, • the CGT event happened after 11.45am (by legal time in the Australian Capital Territory) on 21 September 1999, • you acquired the asset at least 12 months before the CGT event. | Detailed Reasoning - Application to your circumstances: In your case, you are an individual, you held Property A for more than 12 months and you signed the contract of sale after September 1999. Therefore, you are entitled to apply 50% CGT discount on the sale of Property A. In your case, you are an individual, you signed the off the plan contract for the purchase of the apartment on DD MM 20YY, and the contract for sale on DD MM 20YY. Therefore, you held Property A for more than 12 months, and are entitled to apply the 50% CGT discount on the sale of Property A.

Question 1: Are you eligible to claim the main residence exemption under section 118-110 of the ITAA 1997 to the disposal of the property?