The latest update (TD 2026/D1) focuses on what happens tax-wise to a property when someone passes away, and more importantly, who is allowed to live in the home without triggering capital gains tax (CGT) later on.
It might sound technical, but the message is actually very simple.
If someone is meant to live in your property after you pass away, the will must clearly say so.
If it doesn’t, the property could lose valuable tax protection — even if everyone involved agrees on what was “intended”.
Under the tax rules, a home can sometimes stay CGT-free after death if:
Only what’s clearly written in the will matters.
Let’s say:
But…
The will doesn’t clearly say ‘that person has the right to live in the home’
The ATO’s view is that the property may lose its CGT exemption, which could mean tax is payable when the property is sold.
This often comes as a shock – especially years later.
The ATO wants certainty.
They don’t want tax outcomes to depend on:
Their position is basically:
“If it matters for tax, it needs to be written down properly.”
If you are:
This is a strong reminder that tax, estate planning and accounting all need to work together.
A will that isn’t drafted with tax outcomes in mind can unintentionally create:
At HRKAC Group, we regularly see situations where:
This ATO update reinforces why good accounting advice isn’t just about compliance – it’s about planning ahead.
If you’re unsure whether your current structure, property ownership, or estate plan could be affected, it’s worth reviewing it now – not years down the track when a property is sold and tax becomes unavoidable.
If someone is meant to live in your property after you’re gone, make sure it’s clearly written into your will – and reviewed with tax advice in mind.
If this raises questions about your personal situation, our team of Geelong accountants can help guide you through the financial considerations and ensure everything is structured appropriately.
The Hrkac Group is a multi-division firm focused on creating positive outcomes for your future financial growth located in the heart of Geelong. A collective of financial advisers, mortgage brokers, and accountants, focused on creating positive outcomes for your future financial growth
Where legal advice is required, we can also refer you to our trusted business partners at MMH Lawyers, who can assist in reviewing or updating your Will to ensure it complies with current requirements and aligns with your intentions.
Taking a coordinated approach helps provide clarity and peace of mind, knowing your financial and legal affairs are working together.
