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INCOME TAX ASSESSMENT ACT 1997 - SECT 118.185 Partial exemption where dwelling was your main residence during part only of ownership period

INCOME TAX ASSESSMENT ACT 1997 - SECT 118.185

Partial exemption where dwelling was your main residence during part only 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:

Start formula CG or CL amount times start fraction Non-main residence days over Days in your *ownership period end fraction end 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:

Start formula $10,000 times start fraction 365 over 3,650 end fraction equals $1,000 end formula

  (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.

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