Inheriting a property can be one of the more complicated things that happens in an otherwise straightforward financial life. The decisions you make in the first few months matter.
Here is a practical guide for NSW residents dealing with an inherited property in 2026.
Step One: Establish Who Controls the Property
If the deceased had a will, the executor named in the will has authority to deal with the estate. If there is no will, someone must apply to the NSW Supreme Court for letters of administration before any decisions can be made.
The property cannot be listed for sale, leased, or significantly altered until legal authority over the estate is established. Attempting to act before this is confirmed can create legal and financial complications.
Step Two: Get Probate Before You List
In most cases involving real property in NSW, probate is required before a sale can settle. Probate is the Supreme Court's confirmation that the will is valid and the executor has authority to act.
Applications are lodged through the Supreme Court of NSW. Processing times are typically 4 to 8 weeks. If the estate is complex, involves multiple beneficiaries with different interests, or if the will is contested, this timeline extends.
Start this process as early as possible. Delays in obtaining probate are the most common reason inherited property sales take longer than expected.
Step Three: Understand the Capital Gains Tax Position
The Australian Tax Office has specific rules for inherited property. The key question is whether the property was the deceased's main residence and how long ago the death occurred.
If the property was the deceased's main residence and is sold within two years of the date of death, the estate is generally exempt from capital gains tax.
If more than two years pass, or the property was not the main residence, standard CGT rules apply based on the cost base at the time of inheritance. Get advice from an accountant who understands estate CGT before you make any decisions about timing.
Step Four: Decide Whether to Sell or Hold
Not every inherited property should be sold immediately. Consider whether:
- The property has development potential that would be captured by a longer hold
- The rental market in the area provides strong income that offsets holding costs while decisions are made
- The estate has multiple beneficiaries with different cash needs, requiring a sale to distribute proceeds
In some cases, one beneficiary buying out others is possible, avoiding a market sale altogether.
Step Five: Prepare the Property Appropriately
Inherited properties are often cleared directly from years of occupation and may need practical preparation before they are ready for sale. This is not necessarily a disadvantage. A home with clear space photographs well and allows buyers to project their own vision.
A good agent will advise on what is worth doing and what is not, based on the property type and likely buyer.
We handle deceased estate and inherited property sales sensitively and professionally. Contact Rhys Reid for a confidential discussion.