CGT-free main residence exemption when you own two homes A dwelling is considered to be your main residence from the time you acquired your ownership interest in it if you moved into it as soon as practicable after that time. If you purchased the dwelling, this would generally be the date of settlement of the purchase contract.However, if there is a delay in moving in because of illness or other unforeseen circumstances and you move into the dwelling as soon as the cause of the delay is removed – for example, you recover from the illness – the exemption may still be available from the time you acquired your ownership interest in the dwelling. If you could not move in because the dwelling was being rented to someone, you are not considered to have moved in as soon as practicable after you acquired your ownership interest. A special rule allows you to treat more than one dwelling as your main residence for a limited time if you are changing main residences. Example - Moving in as soon as practicable Mary signed a contract to buy a townhouse in March. She took possession when settlement occurred in April. During this period, Mary was directed by her employer to go overseas on an assignment for four months, leaving late in March. Mary moved into the townhouse on her return to Australia in late July. Mary's overseas assignment was unforeseen at the time of purchasing the property. As she moved in as soon as practicable after settlement of the contract occurred, Mary can treat the townhouse as her main residence from the date of settlement until she moved in. If Mary treats the townhouse as her main residence for this period, she cannot treat any other dwelling as her main residence (except maybe for a limited time Moving houseIf you acquire a new home before you dispose of your old one, both dwellings are treated as your main residence for up to six months if:
the old dwelling was your main residence for a continuous period of at least three months in the 12 months before you disposed of it
you did not use it to produce assessable income in any part of that 12 months when it was not your main residence
the new dwelling becomes your main residence.
If you dispose of the old dwelling within six months of acquiring the new one, both dwellings are exempt for the whole period between when you acquire the new one and dispose of the old one. Example - Exemption for both homes Jill and Norman bought their new home under a contract that was settled in January and they moved in immediately. They sold their old home under a contract that was settled in April. Both the old and new homes are treated as their main residence for the period January to April, even though they did not live in the old home during that period. If it takes longer than six months to dispose of your old home, both homes are exempt only for the last six months before you dispose of the old one. If you decide to claim the main residence exemption for your new home from the time you first move in, then you obtain only a partial exemption when a capital gains tax (CGT) event happens in relation to your old hom