Australia has no inheritance tax, but tax can still apply to what you inherit: capital gains tax when you sell assets, income tax on what they earn, and tax on super paid to non-dependants.
Key facts
- There are no inheritance or estate taxes in Australia (ATO).
- Capital gains tax can apply when you later sell or dispose of an inherited asset such as shares or an investment property.
- The deceased's home is generally exempt from CGT if it was their main residence (and not income-producing) just before they died and the sale settles within 2 years of their death.
- Super paid as a lump sum to a death benefits dependant (spouse, child under 18, a financial dependant or interdependent) is tax-free; for others, such as adult children, the taxable component is taxed at up to 15% plus the Medicare levy.
- Income the estate earns before it's finalised, and income from inherited assets, is taxable.
What tax applies to what you inherit
| Asset | Tax |
|---|---|
| Cash and money in the bank | No tax on receiving it; interest earned after you get it is your income |
| Shares | No tax on receiving them; CGT may apply when you sell; dividends are your income |
| The deceased's home | Exempt from CGT if sold within 2 years (settlement), in most cases, or if it stays the main residence of the spouse, a person with a right to occupy it, or you |
| Investment property | No tax on receiving it; CGT applies when you sell; rent is your income |
| Super (lump sum) | Tax-free to a dependant; taxable component taxed at up to 17% (taxed element) or 32% (untaxed) for anyone else |
Super death benefit tax calculator
| Taxable component (taxed element) | Tax for a non-dependant (up to) | You keep |
|---|---|---|
| $100,000 | $17,000 | $83,000 |
| $250,000 | $42,500 | $207,500 |
| $500,000 | $85,000 | $415,000 |
| $1,000,000 | $170,000 | $830,000 |
The tax-free component isn't taxed. The rates are maximums (15% or 30% plus the 2% Medicare levy); the fund withholds at these rates and the final tax is worked out in your tax return. Super paid to the deceased's estate is taxed in the estate instead.
The inherited home: 2-year rule
- The deceased lived in it as their main residence and didn't use it to produce income just before they died (or bought it before 20 September 1985).
- The sale settles within 2 years of the death. You can rent it out in the meantime.
- Or it stays the main residence of the deceased's spouse, a person with a right to live there under the will, or you.
- If the deceased had been a foreign resident for more than 6 years when they died, the exemption isn't available.
Common questions
Is there inheritance tax in Australia?
No. The ATO says there are no inheritance or estate taxes in Australia. You don't pay tax just because you receive an inheritance.
Do I pay tax on money I inherit?
No tax on receiving the money itself. Interest or other income it earns afterwards is your taxable income.
Do I pay capital gains tax on an inherited house?
Not if the deceased lived in it as their main residence (and didn't rent it out) just before they died and you sell it with settlement within 2 years of the death, in most cases. Otherwise CGT may apply, with a cost base that depends on when the deceased bought it.
Do adult children pay tax on super they inherit?
Usually yes: adult children are generally not death benefits dependants unless they were financially dependent or in an interdependency relationship. The taxable component (taxed element) is taxed at up to 17% including the Medicare levy; the tax-free component isn't taxed. On $500,000 of taxable component that's up to $85,000.
Is an inheritance counted for Centrelink?
It isn't taxed, but it counts as an asset and is deemed for the income test once you receive it. Giving it away can be caught by the gifting rules.
See also the capital gains tax calculator, the Centrelink gifting rules and super rates and thresholds.
Sources: ATO if you are a beneficiary of a deceased estate, inherited property and CGT, paying super death benefits and Schedule 12 withholding. Checked 22 October 2026. General information, not legal or tax advice.