Private ruling: CGT - main residence
Date of advice: 13 May 2022
Published: August 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does section 118-135 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to treat the property as your main residence from the date you acquired your ownership interest in it? | A1: Yes. Under section 118-135 of the ITAA 1997, a dwelling can be treated as your main residence from when you acquired your ownership interest in it until it actually became your main residence provided you moved into the dwelling when it was 'first practicable' to do so after acquiring your ownership interest. The provision takes into account situations where there is a delay in moving in because of illness. In your case, your move into the property was delayed due to health issues. Once they were resolved the property became your main residence. Consequently, it is considered that you moved into the property as soon as practicable and it can be treated as your main residence from when your ownership interest was acquired.

Relevant facts and circumstances: You purchased a property with the intention of moving in and making it your home straightaway. Shortly afterwards you began suffering from serious health issues and it became apparent that you would not be able to move into the property immediately. Consequently, you entered into a x month lease to rent out the property while you were dealing with your health issues. You moved into the property once your health issues were resolved. It was not intended at any point for the property to become an investment property. You did not claim the main residence exemption for any other property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-135