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Main Residence

Discussion in 'Investing Glossary' started by Glossary, 26th Sep, 2006.

  1. Glossary

    Glossary Active Member

    12th Sep, 2006

    The sale of your family home (or to use the technical term your Main Residence) is probably the last remaining tax free transaction available to most people. That is because any capital gain or loss from sale of your Main Residence is ignored for Capital Gains Tax (CGT) purposes.

    For most people figuring out whether a property is their Main Residence is pretty straightforward. However, as the term is not defined in the income tax laws, it has its ordinary meaning. Thus key factors will include:
    • the length of time you have lived in the property
    • where the rest of your family lives
    • whether you keep your personal belongings at the property
    • the address to which you have your mail delivered
    • whether or not your address on the electoral roll matches the property.
    One point to beware of though, is that if you buy worn out properties, live in them while you renovate and then sell them on a regular basis you may not qualify for the CGT exemption. The reason is that in this case the ATO may regard the proceeds of sale as part of your ordinary income rather than a capital gain.

    Main Residence was formerly referred to as your Principal Place of Residence or PPOR. However, the term PPOR is still commonly used.

    To encourage first home-buyers, each state and territory provides limited stamp duty relief on the purchase of a person's first PPOR. In addition, although the treatment of one's PPOR differs between the states, generally the PPOR is not counted when calculating land tax.

    Also known as:
    • Principal Place of Residence
    • PPOR

    See also: