Main Residence Exemption

In a recent case, the Administrative Appeals Tribunal held that the CGT main residence exemption was not available to a husband and wife (the taxpayers) on a unit they acquired with the intention of it being their main residence, but which they ultimately never lived in.

The taxpayers purchased a unit in June 2000 with the intention of residing in it. However, due to the nature of the husband’s work, they said that it only became practicable for them to reside in the unit in January 2006.

The Tribunal’s view was the taxpayers did not move into the unit when it was first practicable to do so. It was also the Tribunal’s view that the nature of the husband’s work was not sufficient to enable the main residence exemption to be invoked.

• TIP: The Commissioner has stated in a Taxation Determination that the mere intention to occupy a dwelling as a main residence is insufficient to obtain the exemption.