Capital Gains Tax exemption on your house

You can generally claim the main residence exemption from Capital Gains Tax (CGT) for your home.

To get the exemption, the property must have a dwelling on it and you must have lived in it. You're not entitled to the exemption for a vacant block.

Generally, a dwelling is considered to be your main residence if:

  • you and your family live in it
  • your personal belongings are in it
  • it is the address your mail is delivered to
  • it is your address on the electoral roll, and
  • services such as phone, gas and power are connected.

The main residence exemption is not based on one factor alone, and the weight given to each varies depending on individual circumstances. The length of time you stay there and your intention in occupying it may also be relevant.

It may be possible to have your home in a trust or company as the test is based on criteria above.

A number of taxpayers have lost cases in court and had to pay CGT because they didn’t move into their home early enough. The Australian Taxation Office (ATO) are tracking sales now through their new computer and support from State Governments.

Capital gains which was based on honesty is now based on evidence.

Call in your local TaxAssist Accountants branch to see an accountant for more specific details.

By Terry Murphy
Last updated October 2016