Private ruling: CGT main residence
Date of advice: 4 February 2026
Published: 30 March 2026
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you a resident of Australia for taxation purposes during the relevant income years? | A1: No. | Q2: Are you able to exempt any capital gain made on the sale of the property under the main residence provisions? | A2: No. | Q3: Are you eligible to treat the property as the main residence and utilise the downsizer contribution cap of up to $300,000 on your superannuation contribution from the sale proceeds? | A3: No.

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You are not a permanent resident of any other country. You were made redundant from your employment in Australia. You owned a property which you purchased a number of years ago. This property was your main residence. You commenced traveling to other countries after you were made redundant. You commenced renting your home out in Australia a few years ago. You kept a bedroom for your own use in the property and rented the remainder out. You returned to your home in Australia when you visited. You could not return to Australia during Covid. The property in Australia was listed for sale and settled. You commenced living with your now spouse and their family overseas. A house was built for you on your spouse's family property. You currently enter the Country Z on a tourist visa which allows you to be in Country Z for a short period of time, the visa is renewed periodically within Country Z. You are intending on applying for a visa now that you have married in Country Z. You married your spouse in Country Z. You do not work in the Country Z. You travelled to the Country Z a few years ago for a holiday. You met your spouse and their family while on holiday. You have adult children living in Australia. You have a bank account and a super account in Australia. You will return to Australia once a year and will stay with your relative. You were in Australia for a number of days during each year. You are not eligible to contribute to the PSS or the CSS Commonwealth Super funds. You do not meet the requirements of the life events test under Section 118- 110(3) and (4) of the Income Tax Assessment Act 1997 )).

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 subsection 292-102 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). The terms 'resident' and 'resident of Australia', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are: • the resides test (also referred to as the ordinary concepts test) • the domicile test • the 183-day test, and • the Commonwealth superannuation fund test. The resides test is the primary test for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'. Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests (the domicile test, 183-day test and Commonwealth superannuation fund test). Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals . We have considered the statutory tests listed above in relation to your situation as follows: | Detailed Reasoning - The Resides test: The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'. The observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important: Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... [W]here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained. The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test: • period of physical presence in Australia • intention or purpose of presence • behaviour while in Australia • family and business/employment ties • maintenance and location of assets • social and living arrangements. It is important to note that no one single factor is decisive, and the weight given to each factor depends on everyone's circumstances. Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia. | Detailed Reasoning - Application to your situation: You were made redundant from your employment in Australia. You commenced travel overseas. You met your now spouse in Country Z and commenced a relationship. You commenced living in Country Z when a house was built on the property owned by your now spouse and their family. You travelled between Australia and Country Z. Covid meant that you were not able to travel back to Australia. You married in Country Z. The Commissioner is satisfied that from January 20XX you were not a resident of Australia for taxation purposes under the resides test. You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test, 183-day test and Commonwealth superannuation fund test). | Detailed Reasoning - Domicile test: Under the domicile test, you are a resident of Australia if your domicile is in Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia. | Detailed Reasoning - Domicile: Whether your domicile is in Australia is determined by the Domicile Act 1982 and the common law rules on domicile. Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts. | Detailed Reasoning - Application to your situation: In your case, you were born in Australia, and your domicile of origin is Australia. You have not taken any steps to change your domicile. Therefore, your domicile is Australia. | Detailed Reasoning - Permanent place of abode: If you have an Australian domicile, you are an Australian resident unless the Commissioner is satisfied that your permanent place of abode is outside Australia. This is a question of fact to be determined considering all the facts and circumstances of each case. 'Permanent' does not mean everlasting or forever, but it is to be distinguished from temporary or transitory. The phrase 'permanent place of abode' calls for a consideration of the physical surroundings in which you live, extending to a town or country. It does not extend to more than one country, or a region of the world. The Full Federal Court in Harding v Commissioner of Taxation [2019] FCAFC 29 held at paragraphs 36 and 40 that key considerations in determining whether a taxpayer has their permanent place of abode outside Australia are: • whether the taxpayer has abandoned, in a permanent way, living in Australia • whether the taxpayer is living in a town, city, region, or country in a permanent way. The Commissioner considers the following factors relevant to whether a taxpayer's permanent place of abode is outside Australia: • the intended and actual length of the taxpayer's stay in the overseas country • whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time • whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family, or a household), outside Australia • whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence • the duration and continuity of the taxpayer's presence in the overseas country • the durability of association that the person has with a particular place in Australia, i.e. maintaining assets in Australia, informing government departments such as the Department of Social Security that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer's children, family ties and so on. As with the factors under the resides test, no one single factor is decisive, and the weight given to each factor depends on the individual circumstances. | Detailed Reasoning - Application to your situation: The Commissioner is satisfied that your permanent place of abode is outside Australia in Country Z because: • You have been living in Country Z for several years • You have lived in a house built on your now spouse's family property • You have married a Country Z national • You are not a resident under this test. | Detailed Reasoning - 183-day test: Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both: • the person's usual place of abode is outside Australia, and • the person does not intend to take up residence in Australia. | Detailed Reasoning - Application to your situation: For several years you have spent most of your time outside Australia in Country Z. In the first income year you were in Australia for more than 183 days and would be a resident under this test. For the other income years you were not in Australia for more than 183 days. You are not a resident under this test. | Detailed Reasoning - Superannuation test: An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976, or they are the spouse, or the child under 16 of such a person. | Detailed Reasoning - Application to your situation: You are not a member on behalf of whom contributions are being made to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or a spouse of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test. Conclusion : You are not a resident of Australia for taxation purposes for the relevant income years from MM of 20YY. You furthermore will be considered not be considered an Australian tax resident for the 20YY to 20YY income years under the resides, domicile and 183 days tests. You are therefore not a tax resident for the 20YY- 20YY income years. | Detailed Reasoning - Question 2: Main residence exemption : New laws have been recently introduced in Australia which deny non-residents of Australia access to the capital gains tax main residence exemption in respect of the sale of an Australian property after 30 June 2020 unless the requirements of the 'life events test' are satisfied (Section 118- 110(3) and (4) of the Income Tax Assessment Act 1997 )). A taxpayer will satisfy the life events test if the taxpayer has been a foreign resident for 6 years or less and satisfies one of the following: • the taxpayer or the taxpayer's spouse or child under 18 years has had a terminal medical condition during that period of foreign residency; • the death of either the taxpayer's spouse or child under 18 years at the time of death during that period of foreign residency; • the CGT event happens because of the taxpayer's divorce or separation (s 118-110(5)). | Detailed Reasoning - Life Events Test: You have been a non-resident of Australia for more than 6 years. You do not meet any of the above criteria. You are not able to access the main residence exemption on the sale of your Australian property either a full or partial main residence exemption. | Detailed Reasoning - Question 3: Downsizer contribution : Subsection 292-102(1) of the ITAA 1997 | Detailed Reasoning - Criteria for a downsizer contribution: (1) A contribution is covered under this section if: (a) the contribution is made to a complying superannuation plan in respect of you when you are aged 55 years or over; and (b) the contribution is an amount equal to all or part of the capital proceeds received from the disposal of an ownership interest (the old interest ) in a dwelling; and (c) you or your spouse held the old interest just before the disposal; and (d) any capital gain or capital loss from the disposal of the old interest: (i) for the case where you held it just before the disposal - is wholly or partially disregarded under Subdivision 118-B (or would have been if you had acquired it on or after 20 September 1985); or (ii) otherwise - would have been wholly or partially disregarded under Subdivision 118-B had you acquired the old interest on or after 20 September 1985 and held it for a period before the disposal; and (e) the condition in subsection (2) is met for the disposal; and (f) the dwelling is located in Australia, and is not a caravan, houseboat or other mobile home; and (g) the contribution is made within 90 days, or such longer period as the Commissioner allows, after the time the change of ownership occurs as a result of the disposal; and (h) you choose, in accordance with subsection (8), to apply this section to the contribution; and (i) there is not already a contribution covered under this section, and made to a complying superannuation plan in respect of you, from an earlier choice you made in relation to the disposal of: (i) another ownership interest in the dwelling that was not a related spousal interest to the old interest; or (ii) an ownership interest in another dwelling. | Detailed Reasoning - 10-year ownership condition: (2) The condition in this subsection is met for the disposal of the old interest if either or both of the following paragraphs applies: (a) at all times during the 10 years ending just before the 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; (b) if subsection 118-147(1): (i) applies because the old interest was a substitute property interest (within the meaning of that subsection) for an old dwelling referred to in paragraph 118-147(1)(a); or (ii) would have applied as described in subparagraph (i) if paragraph 118-147(1)(a) were modified to refer to a dwelling (the old dwelling) that was your main residence; you, your spouse or your former spouse acquired an ownership interest in that old dwelling at least 10 years before the disposal. | Detailed Reasoning - Cap on the amount of contribution: Subsection 292-102(3) states that despite subsection (1), the contribution is covered under this section only to the extent that it does not exceed the lesser of: (a) $ 300,000, less any other contribution that is already covered under this section and made to a complying superannuation plan in respect of you; and (b) the sum of the capital proceeds from the disposals of: (i) the old interest; and (ii) any related spousal interest to the old interest; Less the sum of all other contributions that are already covered under this section in relation to the disposal of the old interest or any related spousal interest to the old interest and made to complying superannuation plans in respect of you or your spouse. | Detailed Reasoning - Capital gains tax and main residence exemption: Paragraph 44 of the Law Companion Ruling LCR 2018/9- Housing affordability measures: contributing the proceeds of downsizing to superannuation, states to be eligible for the downsizer contribution, the property must be the individual's main residence for the purposes of the main residence exemption. The capital gain or loss incurred upon disposal of the property must be wholly or partially disregarded because the property has been treated as their main residence. In your case you are not eligible for a full or partial CGT exemption on the property, and therefore not eligible to make a downsizer contribution.