Leave Your House to Your Child in Australia: CGT Within Two Years

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What to include in your will to leave the family home to your child

A will needs specific details to pass your house without confusion or delay. Vague wording can lead to disputes between siblings or family members after a parent dies.

Start with the property itself. Use the full street address and, where you have it, the certificate of title reference. This removes any doubt about which property you mean, especially if you own more than one.

Name your child precisely: full legal name and date of birth. This matters more than people expect, particularly in families where names are shared across generations or where a child has changed their name.

Add a fallback beneficiary too. If your child dies before you, your will should say who inherits instead, whether that's grandchildren, another family member, or a different arrangement entirely.

• Use the full address and title reference, not just "my house" or "the family home"
• Name the child with full legal name and date of birth
• Include a backup beneficiary in case your child predeceases you
• Decide whether the gift is outright ("I give my house at [address] to [child]") or subject to conditions

Outright gifts are simple: the house goes to your child, free and clear, once the estate is administered. Conditional wording, such as a right to occupy before the property passes outright, adds complexity and is covered later in this guide. Either way, this is about a bequest through your will, not a transfer or gift made during your lifetime.

Signing and witnessing: make the will valid in your state

A will that isn't signed and witnessed correctly can be challenged or rejected during probate, no matter how clear the wording is. The core formalities are much the same across Australia: the will must be in writing and signed by you, you sign (or acknowledge your signature) while two or more witnesses are present at the same time, and the witnesses then sign it. South Australia's Succession Act 2023 and Tasmania's WILLS ACT 2008 both set out this requirement, and other states follow similar rules with local variations.

• Sign the will yourself, with both witnesses watching you sign
• Use independent adult witnesses who aren't named as beneficiaries in the will
• Choose witnesses who can see you sign and understand they are witnessing your signature (they don't need to read the will)
• Avoid crossing out or altering the signed document afterwards

Best practice is to choose witnesses who have nothing to gain from the will. The rules on a beneficiary who witnesses differ between states: in Tasmania, for example, a gift to a witness is void unless an exception applies, such as two other witnesses who gain nothing. Using an independent witness avoids any later argument that the gift was influenced or improperly obtained.

If you need to change something after signing, don't alter the document by hand. In Tasmania, for example, a change made after signing generally doesn't count unless it is signed and witnessed the same way as the will, and other states have similar rules. Legal Aid Victoria says the best way to change your will is to make a new one, with a codicil used only for minor changes. If you're unable to sign yourself due to illness or incapacity, speak with a solicitor about alternative execution methods available in your state. For a full breakdown of state-specific rules, see our guide to will requirements in Australia.

Tax and timing: the CGT exemption when your child inherits the house

Your child doesn't pay capital gains tax just for inheriting your house. They acquire the property on the date you die, and tax only becomes relevant if they later sell it.

If your home was your main residence just before you died, wasn't being used to earn income then, and your child sells within two years, the sale is generally fully exempt from capital gains tax. This exemption is in section 118-195 of the Income Tax Assessment Act 1997, and the Australian Taxation Office explains it in its guidance on inherited main residences. This two-year window gives families breathing room to sort out probate, agree on next steps, and sell without a tax bill eating into the proceeds.

The two-year period isn't fixed in every case. The Commissioner of Taxation can allow a longer period in some cases, for example where the will is challenged or a complicated administration delays the sale. If you expect to need more time, document the cause of the delay as you go: correspondence with the court, probate timelines, or anything else that shows why the sale couldn't happen sooner.

• The two-year clock starts from the date of death, not the date probate is granted
• Keep records of settlement dates, valuations, and any delays from day one
• Get tax advice before selling if the two-year window is close to expiring
• A property used to produce income (such as being rented out) may affect eligibility for the exemption

If your child plans to keep living in the house rather than sell, different rules apply around continued main residence use. Either way, early advice from a tax professional helps your child avoid an unexpected CGT bill when they do sell.

Options when the beneficiary is a minor or needs protection

If your child is under 18, consider getting legal advice about how the house should be managed for them. One option to discuss with a lawyer is a testamentary trust, where a trustee holds and manages the property for the child. The trust can set out when and how the property passes to them.

A right to occupy or life interest clause may be an option if you want someone else, such as a partner or grandparent, to live in the house before it passes to your child. Get legal advice about whether it suits your circumstances. This needs careful wording so everyone understands when the arrangement ends and who's responsible for costs like rates and maintenance in the meantime.

• Name a trustee you trust to manage the property responsibly
• Set a clear age or event that triggers the final transfer to your child
• Spell out who pays for upkeep if someone has a right to occupy first
• Avoid vague timing conditions that could be read different ways

Pro Tip: Name a backup trustee as well as a primary one, in case your first choice can't act when the time comes.

If your family includes stepchildren, a blended household, or anyone likely to contest the will, speak with a lawyer before finalising these clauses. Trust and occupation arrangements are exactly where disputes tend to surface.

Executor duties and the probate/administration timeline for a house

Your executor is responsible for turning your wishes into reality, and a house is usually the biggest job on their list. They may need to apply for a grant of probate to administer the estate. The process depends on the circumstances and state or territory. The executor then gathers the title details, mortgage information, and insurance records before paying any outstanding debts and transferring or selling the property.

Timing varies a lot depending on your situation. A disputed estate, an outstanding mortgage, or a complex mix of assets can all slow things down, sometimes by months.

• Keep a copy of the property title and mortgage statements somewhere your executor can find them
• List your insurer and policy details for the property
• Note any outstanding loans or debts secured against the house
• Leave your executor's contact details with your will, not just in a drawer somewhere

Getting these documents organised now saves your executor time and stress later, and reduces the chance of delays during administration.

When to get legal or tax advice instead of DIY drafting

Some situations call for a lawyer rather than a standard will. Blended families, adopted children, disputed parentage, overseas assets, business interests, family trusts, or an estate likely to be contested all raise issues a straightforward will can't always resolve cleanly.

Bring an inventory of your assets, a summary of family relationships, and your property title details to any appointment. A straightforward will may suit some parents with a family home and clear beneficiaries, but consider legal advice if your circumstances are complex.

How WillBuddy helps parents draft a state-specific will to leave a house to a child

Getting your house into the right hands starts with a will that matches your state's rules and says exactly what you mean. We ask plain questions one at a time, building a will drafted for your state as you go, so you're never guessing whether a clause applies to you.

You can draft and read every word of your will for free before you pay anything. When you're happy with it, the Annual Access plan is $39 a year, and you then print it and sign it with your witnesses. Details are on WillBuddy pricing. If you want a simple path to leaving your home to your child, start your will free at WillBuddy.

This article is general information, not a substitute for advice from a qualified lawyer. Consult a qualified legal professional about your own circumstances before acting on anything here.

FAQ

Can I leave my house to just one child and not the others?

Yes, you can leave your house to one named child in your will. Be aware that other children left out may be able to make a family provision claim if they believe they haven't been adequately provided for, so clear wording and, in complex cases, legal advice help reduce that risk.

Does my child pay tax when they inherit my house?

No, inheriting the house itself doesn't trigger capital gains tax. Tax only becomes relevant if your child later sells the property, and a full exemption generally applies if they sell within two years of your death and the home was your main residence just before you died and wasn't being used to earn income then.

What happens if my child is still a minor when I die?

If your child is under 18, your will can name a trustee to manage the property on their behalf until they reach an age you set. One option to discuss with a lawyer is a testamentary trust, which can hold the property until your child is old enough to take it outright.

Do both witnesses need to be present when I sign my will?

Yes. The usual rule is that you sign, or acknowledge your signature, while both witnesses are present at the same time, not separately (Tasmania's Wills Act 2008, section 8, is one example). Check your state's rules for any exceptions, and using independent witnesses who aren't named in the will is best practice.

What if my child dies before I do?

If your named beneficiary dies before you, the house would pass according to whatever fallback you set out in your will. Without a fallback clause, the law in several states passes a gift to a child who dies first to that child's own children, if they leave any and your will doesn't say otherwise. If not, the gift may fail and the property could be distributed under other terms of the will or intestacy rules, so naming a backup beneficiary is worth doing from the start.

Sources

Show the 5 sources

• Succession Act 2023 (SA)
• Income Tax Assessment Act 1997 (Cth), section 118-195
• ATO: inherited main residence
• Signing and witnessing a will
• WILLS ACT 2008

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