Davis, GlennEvans, Christopher Charles2025-07-092025-07-092024-09Davies, G. & Evans, C.C. 2024, 'The Australian capital gains tax main residence exemption : firm foundations or flaky footings?', eJournal of Tax Research, vol. 22, no. 2, pp. 324-346.1448-2398http://hdl.handle.net/2263/103256Professor John Taylor noted that much of the complexity in the Australian regime for the taxation of capital gains derived from the design of the main residence exemption. Building on this work, this article explores both the policy underlying this most generous concession and the legislative provisions introduced to give effect to that policy. It argues that the underlying policy has failed to provide an appropriate set of foundations for such a major concession, owing more to political pragmatism than to any notions of equity, efficiency or simplicity. These poor foundations have, in turn, meant that the legislative provisions suffer from uncertainty and ambivalence and often do not operate in an effective fashion or as intended. The article considers both policy issues and technical improvements which may lead to improved outcomes in the interpretation and operation of the exemption from capital gains arising on the disposal of the family home.en© Australian School of Business, University of New South Wales.Capital gains taxMain residence exemptionFamily homeComplexityArticle