Tips to get the main residence exemption right
Use this tip sheet when you’ve sold property.
The ATO are focusing on issues with non-reporting of a capital gain, loss or main residence exemption when properties are sold.
1.     If you’ve bought or disposed of property in the past income year, have you used the property solely as your primary place of residence, earned income from it (rental or business), or held it as vacant land?
2.     Be aware of the record keeping requirements. This will make it easier for you to when it’s time to prepare your tax return.
3.     Property transfer information you will need includes:
·       property address
·       contract date
·       settlement date
·       sale price.
4.     If you disposed of vacant land, you're not eligible for a main residence exemption, even if you intended to build your main residence on it.
5.     Check eligibility to use the 6-year absence rule. This rule can only be used if the property was your main residence before you rented it out. If you choose to use this rule, the election needs to be made in your tax return by including the main residence exemption in the CGT section.
6.     One property can be used as a main residence at a time.
·       Have you owned more than one property during any of the ownership period of the property you sold.
·       The only exception is the 6-month period when you move from one home to another.
7.     Has your Australian tax residency changed while owning the property. It may affect your eligibility for the main residence exemption.
 
8.     Include the full or partial main residence exemption in your tax return.
·       under the question Capital gains tax exemption, rollover or additional discount type code
·       select I: Main residence exemption (Subdivision 118-B) from the drop-down list.
For more examples and scenarios, see the ATO’s recently updated factsheet about CGT and the main residence exemption, which is part of the 2025 Tax time toolkit for investors.
 
Here are my contact details if you need assistance with these matters or other tax issues.
 
Kind Regards

Philip Brown Taxation Services
Mob: 0427 625 833
E: [email protected] 
W: pbtaxservices.com.au

Are you a trustee or beneficiary? Changes are coming from 1 July
As part of the Modernisation of Trust Administration Systems (MTAS) project, there’ll be changes from
1 July 2024 for your 2023–24 income year tax return. 

Click on the link below for more information:
​https://www.ato.gov.au/businesses-and-organisations/trusts/in-detail/compliance/modernising-trust-administration-systems