Private ruling: Main residence exemption
Date of advice: 13 June 2018
Published: August 2018
Ruling period: Year ending 30 June 201x
Date scheme commenced: 1 July 201x

Ruling: Q1: Are you entitled to apply the main residence exemption? | A1: No.

Relevant facts and circumstances: You purchased a residential property (the property) in December 19xx, with the intention of treating it as your main residence. In this regard you changed your address on the electoral roll to the address of the property. In addition all property related accounts were directed to you at the property address. The property required some repairs and maintenance which you carried out after settlement (January 19xx) and during that time you lived with your parents. Due to personal circumstances you did not end up moving into the property and in August 19xx you decided to rent the property and continue to living with your parents. The property was leased to tenants from October 19xx. You continued to live with your parents until you married in June 19xx at which time you moved into your spouse’s house. In the ensuing years the property has been rented except for then following periods: ● August 20xx to December 20xx vacant whilst repairs and maintenance were carried out. ● April 201x to September 201x vacant while extensive repairs and maintenance were carried out prior to the sale of the property. You sold the property in October 201x.

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

Reasons for decision: Summary: Section 118-110 of the Income Tax Assessment Act 1997 states that a capital gain or capital loss made from a CGT event that happens a dwelling is disregarded if: ● the taxpayer is an individual ● the dwelling was the taxpayer’s main residence throughout their ownership period. The following factors may be relevant in working out whether a dwelling is your main residence: ● the length of time you live there ● whether your family lives there ● whether you have moved your personal belongings into the home ● the address to which your mail is delivered ● your address on the electoral roll ● the connection of services (for example, phone, gas or electricity) ● your intention in occupying the dwelling. However, a mere intention to occupy a dwelling as your main residence, without actually doing so, is not sufficient to obtain the exemption. In your case, you never lived in the property that you purchased. Although you intended it to be your main residence, that is not sufficient to make the dwelling your main residence for the purposes of the exemption. Accordingly, you are not entitled to any CGT main residence exemption on the disposal of the property.