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  • Cost base of an inherited dwelling

    If you inherit a dwelling there are special rules for calculating your cost base.

    The first element of the cost base or reduced cost base of a dwelling – its acquisition cost – is its market value at the date of death if any of the following apply:

    • the dwelling was acquired by the deceased before 20 September 1985
    • the dwelling passed to you after 20 August 1996 (but not as a joint tenant), and just before the deceased died it was their main residence and was not being used to produce income, or
    • the dwelling passed to you as the trustee of a special disability trust.

    In any other case, the acquisition cost is the deceased's cost base or reduced cost base on the day they died. You may need to contact the trustee or the deceased’s tax adviser to obtain the details. If that cost base includes indexation, you must recalculate it to exclude the indexation component if you prefer to use the discount method to work out your capital gain from the property.

    If you're a beneficiary, the cost base or reduced cost base also includes amounts that the trustee of the deceased's estate would have been able to include in the cost base or reduced cost base.

    See also:

    Last modified: 17 Jul 2017QC 52248