Question:
Question: CGT - Main Residence
We purchased our Darwin residence in October 1988 and lived there until February 2002. We purchased a Queensland home in October 2001 and initially rented it out. From February 2002 until October 2002 we travelled around Australia and then moved into the Queensland home.Then in October 2003 we sold that Queensland home and purchased another. Our accountants have determined that we were liable for CGT on that Queensland home from the date of purchase until occupancy. We believed we were entitled to exemption because it was intended to be our main residence from purchase.We have heard that it is possible to have two family homes for a period of six months, thus we could claim there was no liability for CGT. Were our accountants correct? If no, how do we go about re-opening the issue?
Answer:
Recent changes are outlined below:
Unfortunately, you cannot use the six month rule. A house can continue to be your main residence after you have vacated it but the only time it can be your main residence before you actually move in is if it was a vacant block of land and you built a house on it within four years and moved in as soon as practicable thereafter.Your Queensland home did not become your main residence until you actually moved in. Your accountants' calculation is correct.
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