(1) This section applies if:
(a) a * dwelling (the old dwelling ) is treated as your main residence because of your choice under section 118-145; and
(b) because of an event (the key event ) described in subsection 124-70(1):
(i) you cease to have any * ownership interest in the old dwelling; or
(ii) the old dwelling is lost or destroyed; and
(c) after the key event you have an ownership interest (the substitute property interest ) in:
(i) a dwelling (the substitute dwelling ); or
(ii) land (the substitute land ) that did not have a dwelling on it at the later of the time just after the key event and the time you * acquired the interest; and
(d) you acquired the substitute property interest at a time (the substitute property acquisition time ) no later than one year, or within such further time as the Commissioner allows in special circumstances, after the end of the income year in which the key event happens.
Note 1: Subsection 124-70(1) deals with compulsory acquisitions, disposals in circumstances involving powers of compulsory acquisition, expiry of leases granted by Australian government agencies and loss or destruction of a CGT asset.
Note 2: The substitute property acquisition time may be before, at or after the time the key event happened. The old dwelling and the substitute dwelling may be different or the same. The land on which the old dwelling is erected and the substitute land may be different or the same.
(2) You may choose to treat the substitute dwelling, or a * dwelling you built on the substitute land within 4 years after the later of the time of the key event and the substitute property acquisition time, as your main residence from the later of the following times (or from either of them if they are the same):
(a) the substitute property acquisition time;
(b) the time one year before the key event happened.
(3) Subsection (4) limits the time you can treat a * dwelling as your main residence under this section if you use all or part of it or the substitute land, after the later of the key event and the substitute property acquisition time, for the * purpose of producing assessable income.
(4) The maximum period you can treat the * dwelling that way while you use it or the substitute land as described in subsection (3) is:
(a) 6 years; or
(b) if, just before the key event, you used all or part of the old dwelling for that purpose--so much of the period of 6 years described in subsection 118-145(2) in relation to the old dwelling as had not passed before the event.
(5) If you do not use the * dwelling or substitute land as described in subsection (3) you can treat the dwelling as your main residence under this section indefinitely.
(6) If you make the choice:
(a) you cannot treat any other * dwelling as your main residence while you apply this section; and
(b) section 118-140 does not apply in relation to your * acquisition, while you still have an * ownership interest in the old dwelling, of an ownership interest in the dwelling you choose to treat as your main residence under this section; and
(c) section 118-150 does not apply after the key event to the land on which the old dwelling is erected or the substitute land; and
(d) section 118- 155 does not apply after the key event in relation to the old dwelling, the substitute dwelling or a dwelling built on the substitute land.
(7) Paragraph (6)(a) does not prevent the old dwelling from being your main residence at any time before the key event happened.