Back to Insights

Inherited property may be exempt from capital gains tax

If you have inherited a property and are preparing to sell, you need to understand the tax treatment for capital gains tax.

Special rules exist that enable some beneficiaries or estates to access a full or partial main residence exemption on the inherited property. Assuming the house was the main residence of the deceased just before they died, they did not then use the home to produce an income, and the other eligibility criteria are met, a full exemption might be available to the executor or beneficiary if either (or both) of the following conditions are met:

  • The dwelling is disposed of within two years of the deceased’s death; or
  • The dwelling was the main residence of one or more of the following people from the date of death until the dwelling has been disposed of:
    - The spouse of the deceased (unless they were separated);
    - An individual who had a right to occupy the dwelling under the deceased’s will; or
    - The beneficiary who is disposing of the dwelling.

An extension to the two year period can apply in limited certain circumstances, for example when the will is contested or complex.

If the deceased did not actually live in the property prior to their death and other eligibility criteria are satisfied, it still might be possible to apply the full exemption where the home was treated as their main residence under the absence rule.

If the full exemption is not available, a partial exemption might apply.

Our tax experts work side by side with our lawyers and conveyancers. We can assist you with any wills and estates enquiries and help you with the conveyance of your property when you do decide to sell.

Contact Hannan today to discuss your individual circumstances
Contact Hannan today to discuss your individual circumstances

Related Insights

See Insights
The low down on the NSW Shared Equity Scheme

The NSW government has announced a $780.4 million Shared Equity Scheme aimed at helping some home buyers by reducing the upfront and ongoing costs of taking out a home loan.

Read more
What tax deductions can you claim on your investment property

Many of us have heard of terms such as 'negative gearing' and 'capital gains tax exemption' but there may be other deductibles that you have overlooked. It is important to take the time to do the research and see how these and other deductions can be applied to your property.

Read more
The Family Law court encourages alternative dispute resolution

On 1 September 2021 there were significant changes to the Family Law court and processes. Some of the most significant changes have been the Court’s push for parties involved in a family law dispute to resolve their matters through alternative dispute resolution. 

Read more
See Insights

How can we help?

If you are looking for expert legal, tax or business advisory services, we would love to help. Let’s have a chat.

Find out more