Main residence exemption
An Australian capital gains tax exemption that disregards any capital gain or loss on the sale of a dwelling that has been the taxpayer's main residence for the whole ownership period.
The main residence exemption removes capital gains tax from the sale of a dwelling where the taxpayer lived in it as their home for the entire period of ownership, and the dwelling was not used to produce assessable income. Where those conditions are only met for part of the period, a partial exemption applies.
Key conditions include the requirement that the dwelling be on land of two hectares or less, that the taxpayer be a resident for tax purposes (the exemption was removed for foreign residents for most CGT events on or after 30 June 2020), and that only one dwelling be treated as the main residence at a time.
The exemption interacts with the six-year rule, which allows a main residence to be rented out for up to six years without losing the exemption if no other property is treated as the main residence in that period.
Primary source
Australian Taxation Office (ATO) — Your main residence (home) →Last reviewed 15 April 2026. Rates, thresholds, and deadlines change — always verify against the primary source before making decisions.