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taxread(Initiate)Initiate
5 Aug 2023

Hello,


I have a question regarding the main residence exemption for two individuals who are getting married. Currently, both individuals each own separate properties, and both properties have been used as their main residences without being rented out. As they get married, they are also in the process of buying and moving into a new property that will become their new main residence. Before the marriage and the purchase of the new home, they will continue living separately. However, they are considering selling their existing properties after completing the purchase of the new home.

Here are my questions:

  1. How does the main residence exemption apply in this case? Does getting married affect their ability to apply the main residence exemption on their respective properties?
  2. Would the timing be important here? For instance, if their new home settles (and they move in) one month before getting married?
  3. Can the 6-month rule apply here, given that they will sell their existing properties within 6 months?

Thank you in advance!

1,893 views
4 replies
1,893 views
4 replies

Most helpful response

Most helpful reply

CaroATO(Community Support)Community Support
10 Aug 2023

Hi @taxread,


Because both own their own properties, aren't married or living in a domestic relationship they can both look at claiming the man residence exemption if they meet the eligibility criteria.


So true, timing is everything! Once they're legally married or in a domestic relationship, they've the option of using the 6-month rule. This'll give them some flexibility if they need it.


Now, this is where what the information Bruce4Tax referred you to comes into play. where perhaps once they're married or living in a domestic relationship, they can choose the same or different homes.


If you haven't already, have a look at what a spouse is for tax purposes and more about the 6 month rule.

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Bruce4Tax(Taxicorn)Taxicorn
6 Aug 2023

Special rules apply - see examples here.


https://www.ato.gov.au/Individuals/Capital-gains-tax/Property-and-capital-gains-tax/Your-main-residence---home/Living-separately-to-your-spouse-or-children/


taxread(Initiate)Initiate
8 Aug 2023

Thank you for your response. However, it seems the link provided does not address the questions I had regarding the tax treatment for a couple who will not be living separately after getting married, but rather have their own homes prior to marriage. 

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