Income
8. Absence from Main Residence
Firm / Chambers:
Last updated: 31 Jul 2015
- If the property is not used to earn income then the main residence exemption from Capital Gains Tax (CGT) will apply for an unlimited period.
- There are specific rules about absences from the main residence. The property will continue to be classified as a main residence even when the property is used to earn income for a total of 6 years. This means a property can start as a main residence and then be rented out for 6 years. Provided that after the 6 year period it is re-established as a main residence it will qualify as a main residence for the whole period of ownership.
- Apart from the specific rule about absence you will only qualify for a partial CGT main residence exemption if you have used the property to produce assessable income in the period of ownership.
- Any capital gain will be apportioned to include only the taxable or non-exempt use of the property.
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