Hello all,
My mother recently passed away (in January 2026) and my sibling and I have inherited her home. She bought the property in 1990 (it was her parents’ house, and when they both passed away by 1990 my mother inherited the property with her four siblings; she then bought out her four siblings to own it outright) and lived in it as her principal place of residence until 2014. She then moved into my apartment, where she lived with me (rent-free) for the next 12 years until her death.
She owned no other property during that time but rented out her home after moving out, for the 12 years from 2014 until her death in 2026.
We understand that if we sell the property, there will be capital gains tax payable on the years 2014 to 2026 because it was rented.
So we would like to know: is the CGT payable on the 12 years she rented out the property? Or is there a six-year exemption, as this was our mother’s principal place of residence?
We have also been told that if we do not sell the property within two years of our mother’s death, any later sale after that two years would attract capital gains tax on the entire ownership period from 1990 until 2026.
Is that correct?
If not, what CGT would we be liable for if we sold the property more than two years after her death?
Thanks all !
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1 replies
Author: PollyATO(Community Support)Community Support 4 Aug 2026
Hey there @JayHaitch,
The CGT treatment will depend on whether the property is sold within two years of your mother's death and what exemptions were available during the period she owned the property.
Your mother may have been entitled to a full or partial main residence exemption for the period she lived in the property from 1990 to 2014. She may also have been able to continue treating the property as her main residence for up to 6 years after moving out under the absence rule, even while it was rented, provided the relevant conditions were met.
You'll need to determine whether your mother was eligible to continue treating the property as her main residence under the absence rule while it was rented out. The absent rule may allow a person to continue treating a former home as their main residence for up to 6 years while it's producing income, provided the relevant conditions are met.
To access the deceased estate main residence exemption, an inherited property must be completely sold and settled within two years of the deceased person’s date of death to access a full CGT main residence exemption.
You'll need to consider how the main residence exemption applies to the property and whether the absence rule was available to your mother. If the property is jointly inherited, you and your sibling will generally need to report your respective share of any capital gain in your own tax returns.
