Exemption for Dwelling House

An inheritance or a gift to a dependent relative of a dwelling house is exempt from Capital Acquisitions Tax (CAT) where certain conditions are satisfied.

Qualifying conditions for an inheritance on or after 25 December 2016

You will be exempt from CAT on the inheritance of a dwelling house if:

  • the house was the only or main home of the person who died (this condition does not apply if you are a dependent relative)
  • you lived in the house as your only or main home for the three years immediately before the date of the inheritance
  • you do not own or have an interest in another house
  • you do not acquire an interest in any other house from the same disponer between the date of the inheritance and the valuation date
  • the house continues to be your only or main home for six years after the date of the inheritance. This does not apply if you:
    • are over 65 at the date of the inheritance
    • or
    • are required by reason of employment to live elsewhere
    • or
    • are required to live elsewhere because of your physical or mental infirmity and this is certified by a doctor.

Qualifying conditions for a gift on or after 25 December 2016

You will be exempt from CAT on receipt of a gift of a dwelling house if:

  • you are a dependent relative of the person making the gift because you are:
    • permanently and totally incapacitated due to a physical or intellectual disability, and you are unable to earn a living
    • or
    • 65 years or older at the date of the gift
  • the house was your main home for the previous three years
  • you do not own or have an interest in any other house.

Qualifying conditions for an inheritance or gift before 25 December 2016

If you received a gift or inheritance of a dwelling house prior to 25 December 2016, it will be exempt from CAT if:

  • it was your only or main home for the previous three years. Where the house was a gift:
    • any period of time the person making the gift lived in the house will not count towards the three years. This does not apply if the disponer depended on you because of ill health or old age (65 or over).
    • the house must have been owned by the disponer for three years before you received it.
  • you did not own or have an interest in any other dwelling house on the date of the gift or inheritance.
  • you continued to occupy the house as your only or main home for six years after the date of the gift or inheritance. This does not apply if you were:
    • over 55 at the date of the gift or the inheritance
    • required by reason of employment to live elsewhere
    • or
    • required to live elsewhere because of your physical or mental infirmity and this is certified by a doctor.

Withdrawal or clawback of the exemption

The dwelling house exemption will be withdrawn if:

  • you qualified for the exemption but subsequently acquire another interest in a dwelling house from the same disponer
  • within six-years of qualifying for the exemption you:
    • sell the house and do not replace it with another as your only or main home
    • or
    • no longer occupy the house as your only or main home unless for the reasons listed above.

If you sell the house and do not use the full proceeds for a replacement, a partial clawback will apply.