In this edition:
Six month rule
As a general rule the family home or "main residence" does not attract capital gains tax when it is sold. This exemption usually applies for only one home at any given time. However, there is a tax law which allows you to have two main residences and maintain a CGT-free status for both for a period of time, this is known as the 'six month rule'.
This law states that two properties can be claimed as a main residence at the same time where a person acquires a house that becomes their new main residence before they dispose of the original house. In order to qualify for this exemption: The old house must have been your main residence for at least three months (as a continuous period) in the 12 months prior to transferring ownership; AND If it was not your main residence for any part of those 12 months, it cannot have been used for income producing purposes at all during that non-main residence time.
For more information on this exemption please visit the ATO website – moving into a dwelling. Alternatively contact your Goodwin Chivas Team member if you wish to discuss further.
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