It is generally accepted that an exemption to capital gains tax applies to the family home, or “main residence”, and the main residence exemption usually applies for only one home at any given time.

But there is a rule in the tax law that allows for a taxpayer to have two main residences and still maintain that CGT-free status for both for a temporary period.

Known as the “six month rule”, this tax law states that two properties can be claimed as a main residence at the same time where a taxpayer acquires a dwelling that becomes their new main residence before they dispose of the original dwelling.

Read more about these exemptions here.

However there are two prerequisites to qualifying for this double-up exemption — the old house must have been your main residence for at least three months (as a continuous period) in the 12 months prior to transferring ownership; it can’t have been used for income producing purposes at all during that non-main residence time.

Peter McCarthy

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