The main residence exemption is contained in Sub division 118-B of the Income Tax Assessment Act 1997.  It is designed to ensure that any profits made on the sale of a taxpayers main residence are tax free.  Making it very attractive.

However, there are situations where it may not give you the best outcome.  If a dwelling is sold for a capital loss making the choice to use the main residence exemption will limit the amount of capital loss that can be claimed.

Given that capital losses can be carried forward indefinitely could mean that the main residence exemption may not be in your best interests.  Section 102-15 of ITAA 1997.

McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandco.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.au

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