If your home is destroyed accidentally (such as through a natural disaster), you can apply the main residence exemption to any money you receive as a result.
This means if your home was fully exempt before it was destroyed, then:
- if you sell your vacant land, it is exempt from capital gains tax (CGT)
- any insurance payment or other compensation is exempt from CGT.
If your home was only partially exempt before it was destroyed, CGT will apply to the part that was not exempt. For example, CGT will apply if:
- you used part of your home for rental or business
- your home was on more than 2 hectares of land.
If you move to a new home before you sell the vacant land of your former home, you can treat both as your main residence for up to 6 months.
If you build a new home on your land, you can treat the land as your main residence for up to 4 years before you move in. During this period you cannot claim the main residence exemption for any other dwelling.
We can help you deal with a disaster – for example, by helping you reconstruct your tax records or allowing early access to refunds.