Hi @Bing0304,
The pre-CGT status of your grandfather's property doesn't continue to you as a beneficiary.
When you inherit property that was acquired before 20 September 1985 by a non-resident, you're taken to have acquired it on the date of your grandfather's death. This means the property becomes subject to CGT for you from that date.
Your cost base will generally be the market value of the property at the date of your grandfather's death. This is the starting point for calculating any capital gain or loss when the property is eventually sold.
If the estate sells the property before transferring it to you and the other beneficiaries, the estate itself may have CGT obligations. The estate would calculate CGT based on the sale proceeds minus the cost base (market value at date of death). As an Australian resident beneficiary, you would need to include your share of any capital gain distributed to you in your tax return.
As an Australian resident for tax purposes, you may qualify for the 50% CGT discount on your share of the gain, provided the asset has been held for at least 12 months, noting that the deceased’s ownership period is taken into account (so a fresh 12‑month period from the date of death is not required).
You'll need to keep records of the market value at your grandfather's date of death and any costs incurred by the estate that can be added to the cost base.
Keep in mind that recent Budget announcements may introduce changes to CGT rules, so it’s worth monitoring how these could affect your position. The measures announced in the 2026 Federal Budget are not yet law, but you can read more about the proposed changes in the 2026-27 Budget papers.
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