Hello Chasers,
Generally, when you sell your home, you won’t have any tax to worry about.
However, there are situations when your home will be subject to tax.
The main residence exemption needs to be considered in a variety of situations when you sell your home.
The ATO has been seeing issues with non-reporting of a capital gain, loss or main residence exemption for property sales.
The following tips will help in this regard:
- You should consider if you have started earning income from your home. You may need to get a market valuation for CGT purposes, particularly if you are renting out some or all of your home, and/or running a business from it.
- When renting out a property that was your main residence, you need to consider whether to use the 6-year absence rule when you sell your property. If you choose to use the 6-year absence rule, you should make this election in your return by including the main residence exemption in the CGT section.
- Accountants & Tax agents should not ignore prompts in their software advising that a client has transferred property. Details of property transfers are available in Online services for agents, including the property address, contract date, settlement date and sale price.
- You can only have one property as your main residence at a time. The only exception is the 6-month period when you move from one home to another.
- If your tax residency in Australia has changed during the year, your CGT obligations may also have changed.
If you are unsure about your home sale being taxable, please contact our experienced team on 03-55612643.
Have a great day!
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