Things that LIMIT the CGT Main Residence Exemption

Discussion in 'Accounting & Tax' started by Paul@PAS, 20th Oct, 2021.

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  1. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
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    Location:
    Sydney
    Many people assume that a property that they live in is 100% exempt. This is commonly untrue.

    These are some of the taxing laws which affect this view.
    • Size of the land (2HA limit) s118.120
    • Acquisition froma deceased estate s118.195
    • Comulsory acquisition s118.245
    • Production of income at any time s118.190
    • At the time of the CGT event you are a foreign resident s118.110(3)
    • Occupancy is not a dwelling s118.115
    • The date you commence to occupy the dwelling s118.135
    • Changing residences incl by sale or reletting. If letting consider s118.192 also.. s118.145
    • Absence s118.145 & s118.147
    • Construction of a new home or renovation and you then commence to reside s118.150
    • Death of one owner who was intending to live in a new construction or renovation s118.155
    • Destruction of a main residence and the vacant land is then sold s118.160
    • Sale of adjacent land SEPERATE to the sale of the main residence s118.165
    • Spouses having different main residences s118.170
    • Dependent child havinga different main residence to A parent s118.175
    • Partial exemption formula when dwelling was your main residence for a part of the ownership period s118.185
    • Dwelling used to produce income FOR THE FIRST TIME where it was previously 100% exempt. Costbase reset rule s118.192
    • Dwelling used to produce income from the property (in part) or by a owner as sole trader or partner in partnership. s118.190
    • Dwelling acquired from a deceased estate and s118.195 doesnt apply. s118.200+s118.205
    • Trustee acquires under a will and sells. Costbase modification rule for the deceased's partial residency s118.210
    • Disability trusts s118.215 to s118.230
    • Comulsory acqusitions s118.240 to s118.265
     
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