The Australian Tax Office (ATO) has issued a Practical Compliance Guideline (PCG) relating to the disposal of dwellings acquired from a deceased estate. 


PCG 2019/5 outlines the factors that the ATO considers when deciding to extend the two-year period to disregard capital gains for disposal of a dwelling acquired from a deceased estate as well as the safe harbour compliance approach.

To qualify for the safe harbour, all of the following conditions must be satisfied:

  • during the first two years, more than 12 months were spent addressing circumstances such as:
    • ownership of dwelling or the will being challenged,
    • a life or other equitable interest in the will delays the disposal of the dwelling,
    • the complexity of the estate delaying administration of the estate, or
    • delays in the settlement of the contract or falls through outside of the beneficiary’s control.
  • the dwelling was listed for sale as soon as practically possible after the circumstances above were resolved
  • the sale is settled within 12 months of the dwelling being listed for sale
  • certain circumstances around the disposal cannot have a material effect on the delay, such as:
    • property market prices,
    • delays from refurbishing,
    • inconvenience on the part of the trustee or beneficiary to organize the sale, or
    • unexplained periods of inactivity by the executor in the administration of the estate.

The ATO will also consider the following factors when considering exercising discretion to extend the two-year period:

  • the sensitivity of personal circumstances,
  • the degree of difficulty in locating all beneficiaries to prove the will,
  • any period the dwelling was used to produce assessable income, and
  • the length of time the ownership interest is held

Further information

Australian Tax Office: Practical Compliance Guideline PCG 2019/5, The Commissioner's discretion to extend the two year period to dispose of dwellings acquired from a deceased estate, 27 June 2019

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Any information on this page in relation to mortgages has been prepared by Macquarie Securitisation Limited (MSL) Australian Credit Licence (ACL) 237863 ACN 003 297 336.

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