Our Guide to Selling an Inherited Property

Key Takeaways

• You usually can't sell an inherited property straight away. In most cases the estate first needs a grant of probate (where there is a will) or letters of administration (where there isn't) before the property can be dealt with.
• The property has to be sorted out on the title first. A transmission application moves it into the name of the executor or the beneficiaries so it can legally be sold.
• Capital gains tax often applies, but not always. If the home was the deceased's main residence and you settle the sale within two years of their death, you may be fully exempt.
• Since 1 January 2025, even Australian residents need an ATO clearance certificate, or the buyer must withhold 15% of the sale price at settlement.

Selling a property is rarely simple. Selling one you have inherited adds another layer, because it usually arrives during a season of grief, alongside paperwork you never expected to be responsible for and, quite often, decisions to be made with other family members. It is a lot to carry at an already difficult time.

The reassuring part is that selling an inherited property follows a clear, well-worn path once you know what that path looks like. Our guide to selling inherited property covers the process in Australia from start to finish: the legal steps that come before a sale, the tax questions that catch people out, and where a conveyancer fits in so the whole thing feels far less daunting. Property law differs from state to state, so treat this as a national overview and lean on advice specific to where the property sits.

Why you can't usually sell straight away

When someone passes away, their home does not automatically pass to whoever is named in the will. The estate first needs legal authority to deal with it, and that authority comes from the Supreme Court in the relevant state or territory.

If there is a valid will, the executor applies for a grant of probate. This is the court confirming that the will is legitimate and that the executor has the right to administer the estate. If there is no will, or no executor able to act, a family member usually applies for letters of administration instead, which grants an administrator similar authority.

Until that grant is in place, no one has the legal standing to transfer or sell the property. You can begin preparing, and in some states you can even list and market the home, but the sale itself cannot be completed without it. Getting this step moving early is one of the simplest ways to avoid delays later on.

Transferring the title before a sale

Once probate or letters of administration are granted, the property still sits in the deceased's name on the certificate of title. Before it can be sold, that needs to change through a transmission application, lodged with the land titles office in the relevant state.

There are generally two ways this plays out. The executor can transfer the property into their own name as the legal personal representative and sell it on behalf of the estate, with the proceeds then distributed to the beneficiaries. Alternatively, the property can be transferred directly to the beneficiary or beneficiaries entitled to it, and they sell it themselves.

Which route makes the most sense depends on the will, the number of beneficiaries, and what everyone wants to do. A conveyancer will help you weigh up the options and choose the cleanest path for your situation.

Selling when there's more than one beneficiary

Inherited property is often left to several people at once, which is where things can get delicate. Everyone with an entitlement generally needs to agree on the decision to sell, the asking price, the choice of real estate agent, and the timing of going to market.

Where beneficiaries are aligned, it is straightforward. Where they are not, it helps to have clear, documented agreement in place before the property is listed, so there are no disputes once offers start arriving. If one beneficiary wants to keep the property while others would rather cash out, a buy-out can sometimes be arranged instead of a sale on the open market.

Having a conveyancer manage the paperwork and act as a neutral point of coordination takes a lot of the emotional heat out of these conversations, which matters when family and money sit in the same room.

Capital gains tax on an inherited property

This is the area that surprises people most, so it is worth understanding early. Inheriting a property is not itself a capital gains tax event, but selling it can be. Whether you pay capital gains tax, and how much, depends largely on two things: what the property was used for, and how quickly you sell.

Under the Australian Taxation Office's rules, an inherited dwelling can be fully exempt from capital gains tax if you settle the sale within two years of the person's death, and either the deceased acquired the property before 20 September 1985, or it was their main residence just before they died and was not being used to produce income at that time.

Sell outside that two-year window, or if the property was an investment, and capital gains tax usually applies to the gain in value. The cost base you use to work out that gain also depends on when the deceased acquired the property, so the market value at the date of death can become an important figure.

The two-year period can be extended in limited situations where circumstances outside your control, such as a challenge to the will, held up the sale. Because the calculations hinge on dates, valuations, and how the property was used, this is genuinely worth a conversation with an accountant or tax adviser before you commit to a timeline.

It helps to be clear on the language here. Because the family home usually qualifies for the main residence exemption, many people who inherit a property pay no capital gains tax at all. Where CGT does apply, the taxable capital gain is the difference between the sale price and the cost base. For a property the deceased acquired after 20 September 1985 that cost base is generally inherited from them, while for older properties it is the market value at the date of death.

These are the details a good accountant will confirm, and they are the reason the two-year rule is worth planning around. Where CGT is payable, individuals can usually claim the 50% capital gains tax discount, provided the property, counting the deceased's ownership period, was held for more than 12 months.

The clearance certificate you can't skip

Here is a step that trips up estates and beneficiaries far more than it should. Since 1 January 2025, the foreign resident capital gains withholding rules apply to every property sale in Australia, with no minimum price threshold and a withholding rate of 15%.

In practice, this means that unless the seller gives the buyer a clearance certificate from the ATO before settlement, the buyer is legally required to withhold 15% of the sale price and pay it to the ATO. That applies even when the seller is an ordinary Australian resident and no tax is ultimately owed.

The certificate is free and simply confirms you are an Australian resident for tax purposes, but it can take time to issue, so applying early matters. When you are selling on behalf of a deceased estate, this is one to sort out well before settlement day so the sale proceeds are not held up.

Getting the property ready to sell

With the legal groundwork underway, attention turns to the practical side. Inherited homes have often been lived in for decades, so there may be belongings to sort through, repairs to weigh up, and a decision about whether to sell as-is or invest in a tidy-up first.

A few things are worth checking early. Is there a mortgage still secured against the property that will need to be discharged from the sale proceeds? Is the home adequately insured while it sits empty, given that vacant properties are a common gap in many policies? And what does a current market valuation look like, which also feeds into the capital gains tax position described above?

A good real estate agent and conveyancer working together will keep these moving in parallel rather than one after another, which is often the difference between a smooth sale and a drawn-out one.

Where a conveyancer comes in

Selling any property in Australia means preparing a legally compliant contract of sale, meeting the disclosure obligations for your state, and coordinating a settlement between your bank, the buyer's representatives, the land registry, and PEXA. With an inherited property, there is the added layer of the grant, the transmission, and the estate's obligations sitting behind all of it.

This is exactly the kind of transaction where having the right people in your corner makes the difference. A conveyancer prepares and reviews the contract, handles the disclosure requirements, liaises with everyone involved, and keeps settlement on track, so the legal detail is managed properly while you focus on the parts only you can handle.

How Dott & Crossitt can help

At Dott & Crossitt, we guide sellers through exactly these situations every day. As one of Australia's largest conveyancing firms, with conveyancers backed by in-house solicitors, we are equipped for the straightforward sales and the more complicated estate matters alike. If an issue arises that needs legal muscle, our solicitors are on hand rather than a referral away.

You get fixed, upfront fees with no surprises, a digital dashboard that lets you track every milestone and action in one place, and a real team of people who explain things in plain English rather than legal jargon. With offices across the country, we bring national scale and genuine local knowledge to wherever the property sits. Put simply, we stay in the details so you don't have to be.

If you are preparing to sell an inherited property and want to know your next step, get a quote online or call our team on 1800 870 407.

Selling Inherited Property FAQs

What if the deceased didn't leave a will?

When someone dies without a valid will, they are said to have died intestate. Their estate is then distributed according to a set order of eligible relatives fixed by the law in their state or territory, usually beginning with a spouse or partner and children. A family member applies for letters of administration to gain the authority to deal with and sell the property.

Who pays the rates, insurance and upkeep while the property is being sold?

Until the property is sold or transferred, its running costs, council rates, water rates, insurance, and basic maintenance, are generally met by the estate from estate funds. Keeping insurance current is especially important while the home sits vacant, because an uninsured loss can eat directly into what the beneficiaries ultimately receive.

Do you have to pay stamp duty when you inherit a property?

Inheriting a property is usually treated concessionally for stamp duty, and in many states a transfer to a beneficiary under a will or intestacy attracts only a nominal duty rather than the full amount a buyer would pay. The exact treatment depends on the state and the circumstances, so it is worth confirming locally before assuming either way.

Is the money from selling an inherited property treated as taxable income?

The lump sum you receive from selling an inherited property is not treated as ordinary taxable income, and inheritances themselves are not taxed in Australia. The only tax that may apply is capital gains tax on any gain in the property's value, which is a separate matter from income tax and depends on the timing and use of the property. Australia also has no inheritance tax or estate taxes, unlike some other countries, so there is no separate death duty to reduce what the beneficiaries receive.

What happens if the beneficiaries can't agree on selling?

If beneficiaries who jointly own an inherited property genuinely cannot agree on whether to sell, one or more of them can ultimately apply to a court for an order for sale. Courts are generally willing to order that a jointly owned property be sold and the proceeds divided, though reaching agreement or arranging a buy-out between the parties is almost always faster and less costly.

How long does selling an inherited property usually take?

There is no single answer, because the grant of probate or letters of administration is the main variable, and that can take anywhere from a few weeks to several months depending on the state and how complex the estate is. Once the grant and title transfer are sorted, the sale itself runs on much the same timeline as any standard property sale.

This article provides general information only and does not constitute legal advice. For guidance specific to your situation and your state, get in touch with the Dott & Crossitt team.