Each month I will be bringing you an accountant tip; proudly brought to you by GCG Accountants in Cairns:
In general, when someone stops living in their house it also stops being their main residence and it is subjected to Capital Gains Tax (CGT); however, a person can choose to continue treating a house as their main residence even after they have moved out – subject to certain conditions.
Reasons people move from their house but still continue to recognise it as their main residence are accepting a job overseas, going on an extensive holiday or staying with a sick family member for a long time. During the owners time of absence the properties may be rented out or left vacant.
Generally you can treat a dwelling as your main residence and for up to six years if it is used to produce income (rented) and indefinitely if is not used to produce income.
For you to apply the six year rule the dwelling must have been your main residence first and when owners move back into the property before later leaving again a new six-year period will start. There is currently no limit for how many times an owner can repeat that process.
If you wish to know more about how any of the above relates to your personal circumstances don’t hesitate to contact us anytime.
53 Anderson Street
Manunda, QLD 4870
(07) 4031 3522