Selling a deceased estate property in Australia: probate, who can sign, CGT on inherited property and the two-year rule

Selling a home after someone dies is the same campaign as any other sale wrapped in two extra layers: the legal authority to sell, which comes from the court, and the tax position, which turns on a two-year clock that starts on the day of death. Get the order right and a deceased estate sale is slower than an ordinary one but no harder. Get it wrong and the estate can lose the main residence exemption on a property that was never taxable in the deceased's hands.

This guide follows the order an executor actually meets things in: whether a grant is needed and how to get it, who can sign what and when, the time limits for claims against the estate, the capital gains tax rules from the Income Tax Assessment Act 1997 and the ATO's current guidance, and then the practical run: securing, clearing, presenting and selling. It is general information, not legal or tax advice; a deceased estate is exactly the case where a registered tax agent and an estate lawyer earn their fees. Figures are as at September 2026 and the sources are listed at the end.

First: how the property was owned

Everything depends on what the title says.

• Joint tenants. A home owned by a couple as joint tenants passes to the survivor automatically. No grant of probate is needed for it; the survivor lodges a notice of death or survivorship application with the land registry and becomes sole owner. The house is not part of the estate and the survivor sells it, if at all, as their own.
• Sole owner, or tenants in common. The deceased's interest forms part of the estate and can only be dealt with by the legal personal representative: the executor named in the will, once the court grants probate, or an administrator appointed under letters of administration where there is no will or no executor able to act. Legal Aid NSW states the rule plainly: probate must be obtained if there is "real estate owned in the deceased's sole name or as tenants in common with another person".

The land registries will not register a transfer from a deceased owner without the grant. That is the hard constraint around which the whole sale is planned.

Getting the grant

Probate is applied for in the Supreme Court of the state or territory where the property is. The mechanics vary, but the shape is the same everywhere: publish a notice of intention to apply, wait the required period, file the application with the original will, the death certificate, an affidavit and an inventory of assets and liabilities, and pay the filing fee, which is scaled to the size of the estate.

• New South Wales: the notice is published on the NSW Online Registry at least 14 days before filing, and the Supreme Court Rules expect the application within six months of the death; a later application needs the delay explained in the affidavit.
• Victoria: the Supreme Court requires you to "publish a notice (advertise) online at least 15 days before applying", then lodge through RedCrest-Probate and post in the original will.
• Elsewhere the notice periods and forms differ, and Western Australia and South Australia do not require an advertisement, but every court requires the same core documents.

Processing time depends on the registry's workload and whether the file is clean. Weeks is normal for a straightforward estate; months is common where the will is informal, a beneficiary cannot be found, or the application needs requisitions answered. Because the two-year CGT clock is already running, the executor should lodge as early as the rules allow rather than waiting for the estate to be tidy.

Small estates and estates with no real property can sometimes be administered without a grant. A house in the deceased's sole name almost always needs one.

Who can sign the contract, and when

Only the legal personal representative can sell estate property, and until the grant issues the executor's authority is not yet proved. That produces three practical rules.

1. You can prepare and market before the grant. Appointing an agent, obtaining an appraisal, clearing the house and commissioning the contract documents can all be done while the application is with the court. In Victoria the Section 32 statement must include evidence of the vendor's right to sell, which for an estate is the grant itself, so a Victorian campaign that starts before probate is marketing a property whose statement is not yet complete. Our Section 32 guide covers what that means for timing.
2. You can sign a contract before the grant, but only conditionally. Most estate lawyers will allow exchange on a contract that is expressly subject to the grant of probate being obtained by a stated date, with the buyer able to rescind if it is not. Settlement cannot occur until the grant is registered against the title. Selling unconditionally before the grant, and then failing to obtain it, leaves the executor personally exposed to the buyer.
3. Once the grant issues, the executor is the seller. The executor signs the contract "as executor of the estate of" the deceased, lodges a transmission application so the registry records their authority, and transfers to the buyer at settlement. Beneficiaries do not sign, and their consent is not legally required unless the will says so, though an executor who sells against the wishes of the residuary beneficiaries without good reason invites a dispute.

The executor's duty is to obtain the best price reasonably obtainable. That means an arm's-length campaign, evidence of value, and no sale to themselves or a family member at a discount. Where a beneficiary wants to buy the property, the usual course is an independent valuation, a sale at that value with the other beneficiaries' written agreement, and legal advice on the transfer duty, which in most states applies to any amount the buying beneficiary pays beyond their own entitlement.

Claims against the estate: the time limits

Every state lets certain family members apply to the court for a larger share of the estate than the will gives them. An executor who distributes the proceeds of sale before the time limit has run, and then faces a successful claim, can be personally liable. Selling the property is not the problem; paying out the money is. The limits, from the current legislation:

• New South Wales: 12 months from the date of death (Succession Act 2006, section 58).
• Victoria: 6 months from the grant of probate or administration (Administration and Probate Act 1958, section 99).
• Queensland: 9 months from the date of death (Succession Act 1981, section 41(8)), with a separate rule requiring a claimant to give the executor written notice within 6 months of death if they want to prevent an earlier distribution.
• Western Australia: 6 months from the date the administrator became entitled to administer the estate (Family Provision Act 1972, section 7(2)).
• South Australia: 6 months from the grant (Succession Act 2023, section 118, which replaced the old Inheritance (Family Provision) Act from 1 January 2025).
• Tasmania: 3 months from the grant (Testator's Family Maintenance Act 1912, section 11).
• Australian Capital Territory: 6 months from the grant (Family Provision Act 1969, section 9).
• Northern Territory: 12 months from the grant (Family Provision Act 1970, section 9).

Every one of those Acts lets the court extend time, usually only before the estate is finally distributed. The practical rule is: sell when the market and the estate are ready, hold the net proceeds in the estate account until the limit has passed or the lawyer clears distribution, and note that in New South Wales in particular the clock runs from death, not from the grant, so it may already be well advanced by the time the property settles.

Capital gains tax on an inherited home

Australia has no inheritance tax and no death duty. Death itself is not a taxable event for the home: the transfer from the deceased to the executor, and from the executor to a beneficiary, is disregarded for capital gains tax under section 128-15 of the Income Tax Assessment Act 1997. Tax arises, if at all, when the property is sold, whether by the executor on behalf of the estate or by the beneficiary after it has been transferred to them. The question is whether the main residence exemption covers that sale.

When the sale is fully exempt

Section 118-195 disregards the gain or loss on a dwelling that passed to you as a beneficiary, or that you hold as trustee of the estate, if one condition from each of two columns is met. In plain terms, the gain is fully exempt if either:

• the deceased bought the property before 20 September 1985 (a pre-CGT asset), or the property was the deceased's main residence just before death and was not then being used to produce income;

and either:

• your ownership ends within two years of the death, or within a longer period the Commissioner allows; or
• from the death until you sell, the property was the main residence of the deceased's spouse, of a person given a right to occupy it under the will, or of you as the beneficiary who sells it, and was not used to produce income.

Two points are commonly misunderstood. First, the ATO confirms that the two-year test is met if you "dispose of the property under a contract that settles within 2 years of the deceased's death", and that "it doesn't matter if you used the property as your main residence or to produce income during the 2-year period". A beneficiary can rent the house out for eighteen months and still sell it tax-free at month twenty-three. Second, the exemption is lost entirely if the deceased was an "excluded foreign resident", broadly a foreign resident for more than six years at death, and a beneficiary who has themselves been a foreign resident for more than six years cannot claim it for their period of ownership.

Missing the two years: the 18-month safe harbour

The Commissioner can extend the two-year period where the sale was delayed by circumstances outside your control. Practical Compliance Guideline PCG 2019/5 sets out a safe harbour that, in the ATO's words, "is automatically granted if you satisfy all the following 5 conditions":

1. during the first two years after the death, more than 12 months was spent dealing with one of: a challenge to the will or to ownership of the property; a life interest or other equitable interest under the will that delayed the sale; the complexity of the estate delaying its administration; a sale contract that was delayed or fell through for reasons outside your control; or government restrictions on real estate activity during COVID-19;
2. the property was listed for sale as soon as practically possible once those impediments cleared, and the sale was actively managed to completion;
3. the sale settled within 12 months of listing;
4. none of the following materially contributed to the delay: waiting for the market to improve, refurbishing to lift the price, inconvenience to the trustee or beneficiary in organising the sale, or unexplained inactivity by the executor; and
5. the extension needed is no more than 18 months.

If you meet all five you do not apply; you self-assess. If you do not, you can request a discretionary extension after the sale has settled, and the ATO says it "will only grant an extension if there are exceptional circumstances outside your control". Waiting for a better market is expressly not one of them. That is the single most important sentence in this guide for a family debating whether to hold the house for a year.

If the sale is not fully exempt: the cost base

Where the exemption does not apply, or applies only in part because the deceased had used the home to produce income, the gain is worked out from a cost base the law sets at the date of death:

• if the deceased acquired the property before 20 September 1985, your cost base is its market value on the day they died;
• if the deceased acquired it on or after that date, your cost base is generally the deceased's own cost base on the day they died, unless the property passed to you after 20 August 1996 (other than as a joint tenant) and was the deceased's main residence, not producing income, just before death, in which case it is again the market value at the date of death.

Because so much turns on the value at death, the executor should obtain a written retrospective market valuation as at the date of death from a qualified valuer, even where the sale is expected to be exempt. It is cheap insurance if a beneficiary later needs it. A beneficiary may also add to their cost base the costs the executor incurred, such as conveyancing and the legal costs of obtaining probate or defending the will. For the 50% CGT discount's twelve-month holding test, the deceased's period of ownership generally counts as well as yours. Note that the discount itself is being replaced for gains accruing after 1 July 2027; our explainer on the negative gearing and CGT changes now law covers the transition, which matters for an inherited investment property held past that date.

Who reports the gain follows who sold. If the executor sells, the gain goes in the estate's trust tax return. If the property is first transferred to a beneficiary and they sell, it goes in theirs, and the two-year clock is unaffected by the transfer.

The other taxes and charges

• Transfer duty. A transfer from the estate to a beneficiary in accordance with the will attracts no duty or a nominal amount in every state. A sale to an outside buyer attracts the buyer's normal duty; the estate pays none.
• Land tax. Several states continue the principal-residence exemption for a period after the owner's death, and the estate may otherwise become liable on the following 31 December or 30 June assessment date. Your conveyancer will check the position; on a long administration it can be a real cost.
• Rates, water and insurance continue to accrue and are adjusted at settlement in the usual way.

The practical run

Secure and insure it

Tell the insurer the owner has died and the house is unoccupied. Many home policies restrict or exclude cover once a property has been vacant for more than 60 days, and some require an inspection schedule; the estate needs an unoccupied-property endorsement or a new policy. Change the locks if keys are unaccounted for, redirect the mail, keep the power on for the alarm and the lawn watered, and have someone visit weekly. A break-in or a burst pipe in a vacant estate home is the executor's problem.

Clear it, carefully

The contents belong to the estate until distributed. Photograph everything before it is moved, keep an inventory, distribute specific gifts under the will, then let beneficiaries choose, then sell, donate or dispose. Do it in that order and in writing; more estate disputes start over a dining table than over the house. Budget for a clearance service and skip bins, and check drawers, sheds and the roof space for documents, cash and jewellery before anything goes to the tip.

Present it: as is, or refreshed

The ATO's refurbishment warning cuts both ways. Cosmetic work that takes a fortnight, a clean, a garden tidy, paint and a skip, usually pays for itself and does not endanger the two-year rule. A three-month renovation to lift the price is exactly the delay the safe harbour refuses to excuse, and the estate carries the cost and the risk. Most deceased estates sell best presented clean, empty or lightly staged, and priced for their condition. Our guides on what to fix before selling and staging costs cover where the money goes.

Choose the method

Auction is popular for deceased estates in Sydney and Melbourne for a reason that has nothing to do with price: it gives the executor a transparent, dated process that beneficiaries can watch, and an unconditional contract at the fall of the hammer. Private treaty suits markets where auctions are rare and properties that need a conditional buyer. Either way the executor should keep the agent's written appraisal, the comparable sales and the campaign report on file as evidence that the best price was pursued. See auction versus private treaty and how to choose a selling agent.

Disclosure

A death from natural causes in the home is not a matter the seller must disclose in any state. A death by homicide is treated as a material fact that must be disclosed in New South Wales and Victoria, and an agent anywhere who is asked a direct question must not answer it misleadingly. Beyond that, the estate's disclosure obligations are the ordinary ones for its state, and executors who never lived in the property should say so in the contract documents rather than warrant what they do not know: the NSW, Queensland, South Australian and Western Australian guides cover each state's documents, and the Queensland guide notes that a transmission to a beneficiary is exempt from the seller disclosure scheme but a sale by the executor to the market is not.

A realistic timeline

A clean estate runs roughly: two to four weeks to gather documents and publish the notice; the court's processing time; a two-to-six-week preparation while the application is pending; a four-to-six-week campaign; and a thirty-to-ninety-day settlement. Most straightforward estates settle within six to nine months of the death, comfortably inside the two years. The estates that miss it are the ones with a contested will, a beneficiary living in the house, an executor who does nothing for a year, or a family waiting for prices to recover. Three of those four are the executor's to prevent.

The mistakes that cost estates money

• Waiting for the market. It is the one delay the ATO will not excuse, and on a $1.2 million Sydney home that was the deceased's main residence, losing the exemption can mean tax on the whole gain since purchase.
• Letting a beneficiary live there without a plan. Occupation by a beneficiary who eventually sells it as their main residence can preserve the exemption; occupation by a beneficiary who then moves out, or by someone with no right under the will, does not, and the two years keep running.
• No date-of-death valuation. Without it, a later taxable sale is argued from guesswork.
• Distributing the proceeds early. Sell when ready; hold the money until the family-provision limit has passed or the lawyer clears it.
• Selling to a relative on the quiet. An independent valuation, written agreement from every beneficiary and a market-value price are the minimum.
• Renovating to lift the price. Clean and tidy, yes; three months of trades, no.
• Uninsured vacancy. Read the unoccupied-property clause before the first month is out.

Where this fits

Once the grant is in hand, a deceased estate is an ordinary sale run by a careful seller. Our guide to how to sell a house in Australia covers the campaign end to end, the cost of selling covers what the estate will pay, and the conveyancing guide covers choosing the conveyancer who will handle the transmission and the transfer. If you are an executor who needs a written appraisal for the estate file, request a free appraisal from an agent who sells in the suburb; it is the first document the beneficiaries and the court will want to see.

Sources

• Income Tax Assessment Act 1997 (Cth), sections 118-195 (dwelling acquired from a deceased estate; quoted above), 118-200 (partial exemption), 128-15 (effect of death) and 128-20: legislation.gov.au.
• Australian Taxation Office, Inherited property and CGT (updated 22 June 2026), Cost base of inherited assets (22 June 2026) and Extensions to the 2-year ownership period (1 April 2026); Practical Compliance Guideline PCG 2019/5. Quotations are from these pages.
• Family provision time limits, from the current consolidated Acts: Succession Act 2006 (NSW) s 58; Administration and Probate Act 1958 (Vic) s 99; Succession Act 1981 (Qld) s 41(8) and s 44; Family Provision Act 1972 (WA) s 7(2); Succession Act 2023 (SA) s 118; Testator's Family Maintenance Act 1912 (Tas) s 11; Family Provision Act 1969 (ACT) s 9; Family Provision Act 1970 (NT) s 9. Read on the state legislation sites and AustLII, September 2026.
• Probate procedure: Legal Aid NSW, Applying for probate (real estate rule and six-month expectation, quoted); Supreme Court of Victoria, How to apply for a grant (15-day notice, quoted); Supreme Court of NSW Online Registry (14-day notice of intended application).
• Insurance vacancy clauses, campaign and settlement durations and auction practice are described as market conventions, not rules.