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The bright-line property rule does not tax the sale of a property that has been your main home.

You can claim the main home exclusion if you:

  • used more than 50% of the property’s area as your main home (including the yard, gardens, and garage)
  • used the property as your main home for more than 50% of the time you owned it.

If either one of these is less than 50%, then the main home exclusion does not apply, and you will need to pay tax on any profit when you sell it.

For example, if you use 40% of a property as your main home and rent out 60% as a flat, you cannot use the main home exclusion when you sell that property.

You must have lived in the property as your main home

The exclusion will not apply when only a family member and not the owner has used the property as their main home.

The property does not need to have been used without interruption. For example, a main home can be rented out for short periods while you are on holiday or before settlement of the sale of the property, as long as the total time it is used as your main home is more than the total time it is not used as your main home.

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Last updated: 31 Mar 2023
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