Making a financial difference

« | »

Selling your home and CGT

When it comes time to sell your home, you may be wondering if you will need to pay capital gains tax (CGT).

Generally, if you live in the home you are selling you will not have to pay CGT under the main residence exemption.

The ATO considers a dwelling as your main residence if:
– you and your family live in it
– your personal belongings are in it
– it’s the address your mail is delivered to
– it’s your address on the electoral roll, and
– services such as gas and power are connected.

If the home has been used to produce assessable income such as running a business from it, renting it out or flipping it, you may not be entitled to the full main residence exemption from CGT. This means you will have to pay CGT on part of any capital gain made when your sell your home.

For those who use their home to produce income, i.e., renting out part or all of it, you can work out the capital gain that is not exempt by taking into account the following factors:
– proportion of the floor area that is set aside to produce income
– period you use it for this purpose
– whether you’re eligible for the ‘absence’ rule
– whether it was first used to produce income after 20 August 1996.

This entry was posted on Wednesday, October 18th, 2017 at 9:41 am and is filed under General News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply

You must be logged in to post a comment.