Private ruling: 10-year condition for downsizer
Published: 30 March 2026
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the date of the deceased's death constitute as the acquisition date of the property to the beneficiaries to satisfy the 10-year condition under subsection 292-102(2) of the ITAA 1997? | A1: Yes .

Relevant facts and circumstances: The Applicants spouse and spouse's family member inherited rural land from the deceased, who passed away on Date A. Probate was granted on Date B, and legal title to the property was transferred to the beneficiaries. The inherited land was sub-divided amongst beneficiaries in 20XX and this became the site of the main residence that was constructed in 20XX. The Applicant and spouse have occupied it continuously since this date. The property, including the land and dwelling, was sold under contract dated Date C, with settlement due on Date D. The property was the applicants' main residence at the time of sale.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-130 | Income Tax Assessment Act 1997 section 292-102 | Income Tax Assessment Act 1997 section 128-15(2) | Income Tax Assessment Act 1997 paragraph 292-102(1)(b)

Reasons for decision: Summary: Outlined in Law Companion Ruling (LCR) 2018/9 Housing affordability measures: contributing the proceeds of downsizing to superannuation at point 21 and 22: • 21. To make an eligible contribution, the ownership interest in the dwelling that is disposed of, or an ownership interest in the land on which the dwelling is situated, must have been held at all times during the 10 years prior to the disposal. • 22. Ownership period is calculated from the day the ownership interest in the dwelling commenced to the day it ceased. Generally, this will be from the date of settlement of the purchase to the date of settlement of the sale. 'Ownership interest' is a defined term for the purposes of the ITAA 1997. Accordingly the definition contained with section 118-130 of the ITAA 1997 is of assistance in assessing eligibility to make a downsizer contribution under both subsection 292-102(2) and subparagraph 292-102(1)(b) of the ITAA 1997, as these aspects of the downsizer law refer to the defined term of 'ownership interest'. Subparagraph 292-102(2)(a) of the ITAA 1997 requires that, in order to make a downsizer contribution, at all times during the 10 years just before disposal: i. The old interest was held by you, your spouse or your former spouse; or ii. An ownership interest in the land on which the dwelling is situated was held by you, your spouse or your former spouse. The 'old interest' is the ownership interest in the dwelling that is disposed of in accordance with 292-102(1)(b) of the act. Subsection 118-130(1) of the ITAA 1997 provides that a person has an ownership interest in land or a dwelling if they have a legal or equitable interest in it or aright to occupy it. It is also noted that subparagraph 292-102(2)(a)(ii) of the ITAA 1997 does not require that the individual (or their spouse) has held an ownership interest of the same nature over the period of the ten years. For example, the relevant interest could be a right to occupy for part of that period, and a different kind of interest for the rest of the period, as long as an ownership interest is held at all times for the ten years preceding the disposal. In accordance with the above provisions relating to ownership interests, a right to occupy the land on which the dwelling is situated does convey the required ownership interest to count toward the 10-year ownership requirement. A person with a right to occupy the dwelling for a period will be entitled to take that period into account for the purposes of this requirement. If an individual's right to occupy is replaced seamlessly with an ownership interest in the dwelling itself, which is capable of being disposed of in accordance with 292-102(1)(b), they are able to aggregate these periods in respect of satisfying subparagraph 292-102(2). Section 128-15(2) of the ITAA 1997 states: • The legal personal representative, or beneficiary, is taken to have acquired the asset on the day the deceased died. For the purposes of assessing the satisfaction of the 10-year ownership test, it is apparent that a right to occupy was granted to the Applicant's spouse as a result of the being a beneficiary of a deceased estate, with the deceased passing on 17 November 2013. Point 34 and 35 of the LCR states: • 34. An ownership interest in the land is deemed to have been held for the period it's commencement, generally settlement for the contract to purchase, until the settlement of the contract for sale. • 35. Subdividing land does not necessarily give rise to a CGT event, it merely splits the interest into separate assets into their own right. An ownership interest in the land on which the dwelling is situated is treated as being held from the time that the ownership interest in the original parcel was first held. The subdivision of the land in 2016 did not constitute a new acquisition, as each subdivided lot retains the original acquisition date. Based on the information provided, an ownership interest in the land underlying the dwelling is held at all times for the purposes of subparagraph 292-102(2)(a)(ii). As a result, the time in which the right to occupy was granted, being the deceased's date of date on 17 November 2013, is able to be considered in assessing the 10-year ownership requirements of the downsizer law.