The main residence exemption, and where it stops.
The most valuable concession in the CGT rules, and the most widely misunderstood. Almost every dispute about it comes down to one date: the day the dwelling first produced income.
Quick answer
A dwelling that is your main residence is generally exempt from CGT. The exemption becomes partial — not lost — once the dwelling produces income. Where it would have been fully exempt, ITAA 1997 s118-192 deems you to have acquired it at market value on the day income-producing use began, and that deemed value, not the purchase price, becomes the cost base. The absence rule in s118-145 can cover up to six years of that period separately.
In this cluster
3 guides, in the order they apply.
The absence rule and the cost base reset are separate provisions that often apply to the same property in the same period. Read both before concluding which valuation date you need — and have your accountant nominate it in writing.
The service behind this
When you need the report, not the reading.
Fixed fees from $440 incl. GST for standard metropolitan residential. Quotes returned within 2 business hours, reports in 5 business days of inspection.
Sources
- Market valuation for tax purposes — Australian Taxation Office
- Income Tax Assessment Act 1997 — Consolidated Act, AustLII
- Australian Property Institute — Professional Practice Standards and the CPV designation
General information about how valuations are used for tax purposes. Not tax advice. Your accountant or tax agent should confirm which provision applies to your circumstances.
Written and reviewed by
Jarrad Khoury
Head of Valuations at Asset Valuations Group, where he leads the Business Valuation Services division. Over 10 years in property and business valuation. Registered Valuer in Queensland (Not Limited), Licensed Valuer in Western Australia (Not Limited), CPV through the Australian Property Institute (Not Limited), CPV and CBV through the Australian Valuers Institute, and Registered Business Valuer through the AIBB.
Last reviewed 15 September 2026 · About the practice · Editorial policy