Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p27
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 27/29)
Character Range: 2264011–2266500

of ownership period
 (1) You get only a partial exemption for a *CGT event that happens in relation to a *dwelling or your *ownership interest in it if:
 (a) you are an individual; and
 (b) the dwelling was your main residence for part only of your *ownership period; and
 (c) the interest did not *pass to you as a beneficiary in, and you did not *acquire it as a trustee of, the estate of a deceased person.
 (2) You calculate your *capital gain or *capital loss using the formula:
where:
CG or CL amount is the *capital gain or *capital loss you would have made from the *CGT event apart from this Subdivision.
non‑main residence days is the number of days in your *ownership period when the *dwelling was not your main residence.
Note: The capital gain or loss may be further adjusted if the dwelling was used to produce assessable income: see section 118‑190.
Example: You bought a house in July 2020 and moved in immediately. In July 2023, you moved out and began to rent it. You sold it in July 2030, making (apart from this Subdivision) a capital gain of $10,000. At the time you sold the house, you were an Australian resident.
 You choose to continue to treat the dwelling as your main residence under section 118‑145 (about absences) for the first 6 of the 7 years during which you rented the house out.
 Under this section, you will be taken to have made a capital gain of:
 (3) However, this section does not apply if, at the time the *CGT event happens, you:
 (a) are an *excluded foreign resident; or
 (b) are a foreign resident who does not satisfy the *life events test.

118‑190  Use of dwelling for producing assessable income
 (1) You get only a partial exemption for a *CGT event that happens in relation to a *dwelling or your *ownership interest in it if:
 (a) apart from this section, because the dwelling was your main residence or someone else's during a period:
 (i) you would not make a *capital gain or *capital loss from the event; or
 (ii) you would make a lesser capital gain or loss than if this Subdivision had not applied; and
 (b) the dwelling was used for the *purpose of producing assessable income during all or a part of that period; and
 (c) if you had incurred interest on money borrowed to *acquire the dwelling, or your ownership interest in it, you could have deducted some or all of that interest.
Example: You acquire a house as a beneficiary in a deceased estate, rent it out for 12 months and sell it within 2 years of the deceased's death.