Private ruling: Commissioner's discretion - extension of time
Date of advice: 4 March 2026
Published: 28 April 2026
Ruling period: Year ended 30 June 20YY | Year ended 30 June 20YY | Year ended 30 June 20YY | Year ended 30 June 20YY | Year ended 30 June 20YY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Will the Commissioner exercise the discretion to extend the four-year time period under subsection 118-150(4) of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the dwelling? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time under paragraph 118-150(4)(a) of the ITAA 1997.

Relevant facts and circumstances: On DD MM YYYY, you signed a contract with company A for the construction of a dwelling on the property. The contract contained an express term to the effect that company A must achieve practical completion within XX weeks from the completion of the footings/slab (completion term). The contract provided for the project to be completed in 7 stages: 1. Footings/slab; 2. Wall frames; 3. External cladding; 4. Roof; 5. Linings; 6. Joinery; and 7. Practical completion. The property is less than 2 hectares. On DD MM YYYY, the property settled. In or around DD MM YYYY, company A commenced construction of the dwelling pursuant to the contract. On DD MM YYYY, company A completed the wall frames. On DD MM YYYY, you received correspondence from the builder stating that the cost of materials, supplies, labour and subcontractors had significantly increased. Under your contract with them, you were advised on an increase of $XX that you would be charged. On DD MM YYYY, company A completed the footings/slab on the property. Pursuant to the completion term under the contract, company A was required to achieve practical completion on or before DD MM YYYY. On DD MM YYYY, company A completed the roof. On DD MM YYYY, company A completed the external cladding. On DD MM YYYY, company A completed the linings. By DD MM YYYY, you had paid all outstanding payments under the contract. Since DD MM YYYY, company A has not performed any work on the property. At this stage, the joinery and practical completion stage has not been completed. On DD MM YYYY, you engaged firm A to act for you regarding the breach of contract. On DD MM YYYY, firm A sent correspondence to company A stating that company A had breached the completion term under the contract and you were entitled to cancel the contract. On DD MM YYYY, company A replied to the correspondence dated DD MM YYYY, stating that they were unclear why you wanted to cancel the contract when the project would be completed by DD MM YYYY and that they had provided you with written notice of delays beyond company A's control. On DD MM YYYY, firm A sent correspondence to company A requesting that company A substantiate their claim that the works were near completion. Firm A asserted that company A had not been on site since DD MM YYYY. This letter did not receive a response. On DD MM YYYY, firm A sent correspondence to company A proposing that company A and you agree to terminate the contract immediately; and company A pay you a sum within XX days from the date of acceptance of this offer. On DD MM YYYY, firm A sent correspondence to company A acknowledging that the previous offer on DD MM YYYY did not receive a response and proposed a new offer that company A and you agree to mutually terminate the contract and release the other from all claims. On DD MM YYYY, company A sent you a draft Deed of Termination and Release (the Deed) for your review. On DD MM YYYY, you replied to the proposed Deed stating issues that required to be updated. On DD MM YYYY, you and company A executed the Deed. Under the Deed, both parties agreed to agree to mutually terminate the contract and release the other from all claims. On DD MM YYYY, you entered a new contract with company B to complete the project. Under the new contract company B agreed to finish the project by DD MM YYYY. On DD MM YYYY, your parents took out an equity loan to assist you with the costs of the new builder. On DD MM YYYY, company B completed the construction. Since DD MM YYYY, you have established the property as your main residence. For your ownership period of the property, you have not treated any other property as your main residence. You will not sell the property in the 20YY income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-150 | Income Tax Assessment Act 1997 paragraph 118-150(4)(a) Part 18 of the Tax Laws Amendment (2011 Measures No. 2) Bill 2011