How long do I have to sell the house?
While there is no set time for selling a house after someone passes away, most are sold no sooner than six months, and before nine to twelve months.
According to the Australian Tax Office (ATO), when you choose to sell can impact the taxes incurred. You may be exempt from capital gains tax (CGT) on disposal of an inherited dwelling if:
you dispose of it within two years of your loved one’s death, and
either your loved one acquired the property before September 1985, or at the time of death the property was the main residence of your loved one and was not being rented.*
If you dispose of the property outside of the two-year period, the exemption can still apply if the Commissioner of Taxation grants an extension of the two-year period.
Important first steps – The paperwork
To begin the process, the executor applies for a grant of probate. A grant of probate is a legal document which gives an executor authority to deal with the estate of the deceased according to their will.
The exception to needing a grant of probate is if you hold a property as joint tenants (for example, when you’re part of a couple with assets in both names).
An executor might still enter into a sale contract before a grant of probate is issued, but a will cannot be administered – and settlement cannot happen – until after a probate has been received.
Alternatively, a beneficiary can apply for a grant of letters of administration. The executor then applies to have the title changed from the name(s) of the deceased to their own name.
Also very important, the Transfer of Ownership Needs to be organised. Unless the title has been transferred from the deceased to the joint tenant, executor, or personal representative, the property can’t be sold, or transferred to the purchaser.
Preparing the house for sale
Despite a few exceptions, a deceased estate property sale is treated the same way as any other sale.
The executor will need to obtain multiple appraisals of the property from real estate agents, then collect multiple quotes for any costs related to selling the property. This includes real estate agent fees and contractor quotes if there are repairs to be done.
Keep in mind that there are many ways to sell a property and it’s important to consult an expert prior to making any decisions. Depending on the situation, there may be benefits to different methods of sale.
The executor then prepares the house for sale and works with the agent to list the property for sale.
It is important that the executor maintains transparency at all times, keeping beneficiaries informed throughout the process regarding valuation, property costs, and all details pertaining to the sale.
Once the property is sold
When the property is sold, the executor distributes the funds to the beneficiaries, according to what is outlined in the will.
State by state laws – Deceased estates
As mentioned, here are some links to information regarding the state-by-state rules and regulations relating to deceased estates.
Queensland
For further information visit the Queensland Government website.
Northern Territory
For further information visit Northern Territory Government website.
New South Wales
For further information visit the Supreme Court of New South Wales website.
Australian Capital Territory
For further information visit the Public Trustee & Guardian for the Australian Capital Territory website.
Victoria
For further information visit the Supreme Court of Victoria website.
South Australia
For further information visit the Public Trustee South Australia website.
Western Australia
For further information visit the Western Australia Government website.
Tasmania
For further information visit the Supreme Court of Tasmania website.
This guide is intended to give general advice only. Please speak to your legal and financial professionals for advice that is specific to your situation. Please note that information and tax law may change from time to time – all information provided within this document is correct as of February 2021.
