Private ruling: Main residence exemption
Date of advice: 13 June 2018
Published: August 2018
Ruling period: Income year ended 30 June 2018 | Income year ended 30 June 2019 | Income year ended 30 June 2020 | Income year ended 30 June 2021 | Income year ended 30 June 2022
Date scheme commenced: 1 July 2017

Ruling: Question and answer | Are entitled to claim main residence exemption for the dwelling at XYZ? | Yes.

Relevant facts and circumstances: You are a citizen of a foreign country. You became a permanent resident of Australia in 20XX. You are a resident of Australia for taxation purposes. You own a dwelling located in Australia. You have lived with your spouse in this house since 20XX. No other property was or will be your main residence for the period of the ruling. You have supplied a copy of the statement detailing amounts paid to a local government body since 20XX for your property.

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

Reasons for decision: Summary: Section 118-110 of the ITAA 1997 provides that you can disregard a capital gain or capital loss made from a CGT event that happens to a dwelling that is your main residence. To qualify for full exemption, the dwelling must have been your main residence for the whole period you owned it, the ownership period, and must not have been used to produce assessable income. The guide to Capital gains Tax sets out the factors that are taken into consideration when determining if a dwelling is a taxpayer’s main residence. Whether a dwelling is a taxpayer’s sole or principal residence is an issue which depends on the facts in each case. Some factors may include, but are not limited to: ● the length of time the taxpayer has lived in the dwelling ● the place of residence of the taxpayers family ● whether the taxpayer has moved his or her personal belongings into the dwelling ● the address to which the taxpayer has his or her mail delivered ● the taxpayers address on the Electoral Roll ● the connection of services such as telephone, gas and electricity ● the taxpayers intention in occupying the dwelling A mere intention to occupy a dwelling as your main residence without actually doing so is not sufficient to get the exemption. In your case the Commissioner is satisfied that the property is your main residence as you: ● are a permanent of resident of Australia; ● you had the purchased the property for you and your spouse to live; ● have lived it the property since 20; ● you are paying rates for the property; and, ● you will claim main residence for no other dwelling for the period of the ruling. Accordingly you can treat the property as your main residence under section 118-110 of the ITAA 1997 for the period of the ruling.