Updated 10 October 2026
A fully exempt home needs no valuation. The moment the exemption becomes partial, because the property earned income, because you owned another home, or because you were a foreign resident when you sold, a dated market value decides how much of the gain is taxed. We establish that value from $297 inc. GST.
At a glance
The law never defines "main residence" with a checklist, so the question is factual: is this dwelling actually your home? The indicators the ATO weighs are where you and your family sleep, where your belongings are, your address on the electoral roll, mail delivery, and utility connections. Length of occupation matters but no minimum period is prescribed; what matters is that the occupation is genuine, not staged for the exemption.
The exemption covers the dwelling and up to two hectares of adjacent land used primarily for private purposes. Own a larger block and the excess land is outside the exemption, which immediately creates an apportionment problem and a valuation requirement, because the land value has to be split between the exempt curtilage and the taxable balance.
A dwelling is fully exempt where it was your main residence for the whole period you owned it, it was not used to produce income, and the land it sits on is two hectares or less. In that situation no valuation is needed at any point, because no part of the gain is taxable.
Establishing a dwelling as your main residence is a question of fact rather than a formal election. Where you and your family live, where your possessions are, your address on the electoral roll and with service providers, and the length of occupation all count. Simply owning a property and intending to live in it is not enough.
| What happened | Effect | Valuation needed? |
|---|---|---|
| You rented the whole dwelling out after living in it | Cost base resets to market value at that date under s118-192; the six-year rule may still preserve the exemption | Yes |
| You rented a room, or ran a business from part of the home | Partial exemption, apportioned by area and time | Often |
| The property was rented before you ever lived in it | Partial exemption; no s118-192 reset | Often |
| You treated another dwelling as your main residence for part of the period | Partial exemption for one or both properties | Yes |
| The land exceeds two hectares | Exemption limited to the dwelling and adjacent land up to two hectares | Yes, to apportion |
| You were a foreign resident at the CGT event | Exemption generally denied for events after 30 June 2020 | Yes |
Where the exemption is partial, a capital gains tax valuation establishes the figure the apportionment runs on. Partial exemption is far more common than owners expect. Anyone who has rented out a former home, run a business from a study, or bought before selling has some apportionment in their file.
Where a dwelling that would have been fully exempt first produces income after 20 August 1996, section 118-192 treats you as having acquired it at that moment for its market value. The reset is mandatory where the conditions are met, and it is generous: every dollar of growth while you lived there is removed from the CGT calculation.
It also creates the single most common valuation requirement in the country, because almost nobody obtains a valuation on the day the tenants move in. Full detail on our home to investment valuation page, and the mechanics in the rule explained.
Where part of the gain is taxable, the CGT changes from 1 July 2027 apply to it. Our CGT calculator shows how the reset date splits that gain.
Get the dated market value the apportionment turns on. Independent reports signed by a Chartered Accountant and Certified Property Valuer. Residential $297, commercial $595, AUD inc. GST, delivered in 24 to 48 hours.
Start your orderHow it worksYou can only have one main residence for CGT purposes at any time, with one exception. Where you are moving between homes, both can be treated as your main residence for up to six months, provided the old home was your main residence for a continuous period of at least three months in the twelve months before disposal, and it was not used to produce income in any part of that twelve months where it was not your main residence.
Outside that window, choosing one property means the other accrues taxable days. Where a couple each owned a home before moving in together, they generally must nominate one, or split the exemption between them. Either way, the property carrying taxable days needs a dated value to work out how much of its gain is assessable.
Section 118-145 lets you keep treating a former home as your main residence for up to six years per absence while it earns income, and indefinitely if it does not. Used well it can keep the exemption at 100 per cent through an interstate posting or a stint overseas. The conditions, the reset interaction and the traps get their own treatment in our six-year rule guide; the short version is that the choice costs you the exemption on any other property for the same period, and the market value at the date the home first earned income is the number the whole calculation eventually leans on.
Where you are a foreign resident for tax purposes at the time of the CGT event, the main residence exemption is generally denied for events after 30 June 2020, regardless of how long the property was genuinely your home.
A limited life events exception applies where you were a foreign resident for a continuous period of six years or less and a specified event occurred, such as a terminal medical condition, the death of a spouse or child, or a relationship breakdown. It is narrow and it is tested at the time of the CGT event, so residency status on the day of sale can decide the entire outcome. See expat and foreign resident valuations.
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026, enacted 26 June 2026, does not touch the main residence exemption. A fully exempt home stays fully exempt and needs no 1 July 2027 valuation.
A partly exempt property is different. The taxable portion of the gain is an ordinary capital gain, so it is caught by the deemed disposal at 1 July 2027 like any other taxable asset. Owners of former homes rented beyond the six-year window, homes with a rented granny flat, or homes with a business area all sit in that group. See the 1 July 2027 valuation page.
The date matters more than anything else, and it depends on why the exemption is partial:
If you are not sure which date your situation calls for, ask your accountant to nominate it, or tell us the facts and we will tell you what we usually see. Getting the date wrong is the most expensive error available, because the report is technically fine and answers the wrong question.
| Report | Fee (AUD inc. GST) | Turnaround |
|---|---|---|
| Residential, current or retrospective | $297 | 24 to 48 hours |
| Mixed use or commercial | $595 | 24 to 48 hours |
Properties on land over two hectares, and rural holdings generally, are quoted individually.
It is the exemption in Subdivision 118-B that removes CGT on the sale of a dwelling that was your main residence for the whole period you owned it, was not used to produce income, and sits on two hectares or less. Where any of those conditions fail for part of the period, the exemption becomes partial and part of the gain is taxable.
Only for up to six months while moving between homes, and only where the conditions in the changeover rule are met. Outside that window you must choose one property, and the other accrues taxable days that have to be valued and apportioned.
Yes. Producing income from part of the dwelling makes the exemption partial, apportioned by the floor area used and the period of that use. A short period of income use in an otherwise exempt home still needs to be worked through rather than ignored.
No. Where the exemption covers the entire gain there is nothing to measure, including for the 1 July 2027 transition, which does not affect the exemption. A valuation becomes necessary the moment any part of the gain is taxable.
No. The exemption is unchanged by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. But any taxable portion of a partly exempt home falls under the new indexation and 30 per cent minimum tax rules for growth after 1 July 2027, which is where a 1 July 2027 market value becomes relevant.
