• Flowchart 3.6

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    The capital gains tax (CGT) main residence exemption rules when you sell a dwelling you inherited.

    Real estate and main residence needs to be read with this flowchart.

    1. Did the deceased person acquire the dwelling before 20 September 1985?

    Yes

    Read question 2

    No

    Read question 3

     2. Did settlement of your contract to sell the dwelling happen within two years of the person dying?

    Yes

    Read answer 1

    No

    Read question 5

      3. Was the dwelling the deceased person's main residence just before they died?

    Yes

    Read question 4

    No

    Read answer 2

    4.  Just before they died, was the dwelling being used to produce income

    Yes

    Read answer 2

    No

    Read question 2

    5. From the deceased person's death until settlement of your contract to sell the inherited dwelling, was it your main residence (or the main residence of an individual who had a right to occupy it under the will or the spouse of the deceased person)?

    Yes

    Read question 6

    No

    Read answer 2

    6. From the deceased person's death until settlement of your contract to sell the inherited dwelling, was any part of the dwelling used to produce income?

    Yes

    Read answer 2

    No

    Read answer 1

    Answer 1

    Dwelling is fully exempt

    Answer 2

    Dwelling is not fully exempt
    (but you may qualify for a part exemption)

    • Dwellings that passed to you before 21 August 1996

    This flowchart does not apply to a dwelling that passed to you before 21 August 1996. Real estate and main residence sets out the rules that apply in that situation.

    • Where the deceased person died before 20 September 1985

    If the deceased person died before 20 September 1985, the dwelling is fully exempt when you sell it. However, if you made a major capital improvement to the dwelling on or after 20 September 1985 and have used it to produce assessable income it may be subject to CGT (see Real estate and main residence).

    Last modified: 10 Sep 2010QC 28058