Tax & the family home

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Capital Gains Tax and the Triggers that Reduce or Exclude

Capital gains tax (CGT) applies to gains you made on the sale of capital assets (assets you make money from). Unless an exemption or reduction applies, or you can offset the tax against a capital loss, any gain you made on an asset is taxed at your marginal tax rate. We look at the main residence exemption that excludes your home from capital gains tax and the triggers to reduce or exclude that exemption.

Main Residence Exemption

Your main residence is the home you live in. In general, CGT applies to the sale of your home unless you have an exemption, a partial exemption or you are able to offset the tax against a capital loss.

If you are an Australian resident for tax purposes, you can access the full main residence exemption when you sell your home, if your home was your main residence for the whole time you owned it, the land your home is on is 2 hectares or less, and you did not use your home to produce an income.

What affects the Main Residence Exemption?

Here are a few examples of what can affect the main residence exemption:

  • Not living in the home for the whole time owned
  • Your home has been used to produce an income
  • Foreign resident
  • Spouse living in different home
  • Divorce
  • Inherited the property

Click Here to download our full newsletter and find out more about what excludes your home from Capital Gains Tax and the triggers that reduce or exclude the main residence exemption.

If you would like any more information on Capital Gains Tax, feel free to book an appointment or get in contact with us here at Anova.

Book your Tax Appointment

Don’t forget to schedule a tax return appointment this year, through our online booking system here, or phone our office to schedule a time. Appointments are available face to face, online via Teams / Zoom, over the phone, or by email.

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