Private ruling: Main residence exemption
Published: December 2014
Ruling period: Year ending 30 June 2015
Date scheme commenced: 1 July 2014

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

Relevant facts and circumstances: You purchased a residential property with the intention of treating it as your main residence. You were then sent on an international assignment. During this time you had no option but to rent out the premises as mortgage repayments were due. Circumstances changed and you remained overseas on international assignment for a number of years. You have always maintained the intention to return and treat the property as your main residence. You are contemplating selling the property.

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

Reasons for decision: Summary: In general, your main residence (your home) is exempt from capital gains tax (CGT). The following factors may be relevant in working out whether a dwelling is your main residence: • the length of time you live there - there is no minimum time a person has to live in a home before it is considered to be their main residence • 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. A mere intention to construct or occupy a dwelling as your main residence - without actually doing so - is not sufficient to obtain the exemption. In this case, you have never lived in the property. As outlined above, a mere intention to occupy a dwelling as your main residence is not sufficient to obtain the exemption.