Executors often have to piece together a property’s history from incomplete papers. This checklist sets out what to gather, why each item matters for capital gains tax, and which timing questions to raise with the estate’s accountant. It is general information: the accountant and the estate’s lawyer advise on the estate itself.
At a glance
- date of death papers, and the grant of probate or letters of administration
- how and when the deceased acquired the property, and what it cost
- improvements, with dates, before and after the death
- how the property was used, before and after the death
- whether a date of death value applies, and a valuation if it may be useful
- timing: selling or passing it on, the two-year window, tax before distribution, and 30 June 2027
Date of death papers and your authority
Keep the death certificate or other proof of the date of death, the will, and the grant of probate or letters of administration if there is one. The date of death is the valuation date for any date of death value.
The ATO says that to be recognised as the authorised legal personal representative for tax, an executor needs a grant of probate, and another person letters of administration, from a supreme court. Without one, the ATO can still help, but there are legal limits on the information and funds it can release.
How and when the deceased acquired it
Find the purchase contract and settlement statement, or anything showing when the deceased acquired the property and what it cost, including stamp duty and legal fees. If they inherited it themselves, find those details too. This tells the accountant which rule sets the cost base for the estate and the beneficiaries:
- acquired before 20 September 1985: generally its market value on the date of death (section 128-15)
- acquired on or after that date: generally the deceased’s own cost base, unless it was their home just before they died and was not being used to earn income, in which case its market value on the date of death
Improvements, before and after the death
Gather plans, approvals and invoices for renovations, extensions and other building work, with dates. The ATO lists capital expenditure on improvements, such as extensions or additions, among the records to keep for capital gains tax, and they show a valuer what the property was like on the date of death.
One special case: the ATO says that if the deceased acquired the property before 20 September 1985 and made a major improvement on or after that date, a beneficiary is treated as acquiring a single asset, with a cost base of its market value, including the improvement, on the day the deceased died.
List any work since the death too, such as repairs, a clean-out or a renovation before a sale, with dates. The property is valued as it was on the date of death, so later work is left out.
How the property was used
Write down how the property was used, with dates:
- whether it was the deceased’s home just before they died, and whether any of it was rented out or used for a business then
- any earlier periods when it was rented or used to produce income
- after the death, who lived there, such as a surviving spouse, someone with a right to live there under the will, or a beneficiary, and whether it was rented
These facts decide whether the date of death value sets the cost base for a home (section 128-15), and whether the main residence rules for estates can exempt a gain (section 118-195). Leases and rent records help the valuer too.
Whether a date of death value applies
| If the property | The date of death value, generally |
|---|---|
| was acquired by the deceased before 20 September 1985 | Becomes the cost base for the executor and the beneficiary (section 128-15) |
| was the deceased’s home just before they died and was not being used to earn income | Becomes the cost base (section 128-15) |
| passes to a charity or other tax-exempt entity, to the trustee of a complying super fund, or in some cases to a foreign resident | Is used to work out a capital gain or loss for the deceased, reported in the date of death return, with exceptions (section 104-215) |
| fits none of these | Is not the cost base, which carries over from the deceased. For an inherited home, the ATO says to keep its market value at the date of death until you are sure of the circumstances, so ask the accountant |
Where a date of death value applies, a valuation at that date may be useful. The ATO tells someone who inherits a person’s home to keep a record of its market value when the person died and, if the executor has had it valued, to get a copy of the report. A date of death valuation can be prepared months or years later: see deceased estate valuations.
Timing to raise with the accountant
- Selling or passing it on. If the executor sells during the administration, the normal capital gains tax rules apply to the estate’s gain or loss. If the property passes to a beneficiary, a gain or loss the executor would otherwise make is disregarded (section 128-15).
- The two-year window. A home that qualifies may be exempt if the estate or a beneficiary disposes of it within two years of the death. The ATO says this is met if the contract settles within that time, and that the period can be extended where exceptional circumstances outside your control delay the sale.
- Tax before distribution. The ATO says it is important to finalise any tax obligations before distributing the estate’s assets, and that completing the administration of an estate typically takes 6 to 12 months but can take longer. The executor may need to lodge a date of death return for the deceased and trust tax returns for the estate.
- 30 June 2027. If the estate or a beneficiary will still hold the property on 30 June 2027, ask whether the capital gains tax changes that start on 1 July 2027 affect it. A valuation at that date is prepared after the day: see 30 June 2027.
We value property. We do not give tax or legal advice. The estate’s accountant decides which capital gains tax rules apply and when, and its lawyer advises on the will and the administration.