There are no death taxes in Australia. This means that if you receive a property from a deceased estate, no tax is payable on that transfer. However, tax may be payable if you sell it down the track.

If the property was a main residence before death, then, providing you sell it within 2 years of the date of death, it will be capital gains tax free. If the property has been rented out, then you essentially ‘inherit’ the cost base of the property if it was bought after September 1985. E.g. a property was bought in 2005 for $500k. It was transferred into your name in 2014 after death.

If you sell the property for $750k, then your capital gain is $250k and you will be taxed on that. If the property was purchased before September 1985, then the cost base of the property is the value at the date of death, e.g. $700k. If you sell it 4 years later for $900k, the capital gain is $200k. The tax issues regarding property from deceased estate is complex, but there are some smart things that you can do to minimise the capital gains tax.

Please speak to your accountant.


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