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If you inherit a residential property you will not pay tax on the property when you inherit it. Also, the bright-line property rule does not usually apply when you sell an inherited property.

However, if you buy another beneficiary's share in the property - the share you buy is taxable if you sell the property in the bright-line period.

Example: Paul and Mel inherit a property

Paul and Mel are each left a half-share in a residential property.

Mel sells his half-share to Paul at market value on 12 April 2019. Paul is now the only owner of the property. 

He sells this property on 15 March 2020. Because he has sold the property within 5 years of buying Mel's half-share - he will pay tax on 50% of any gain he makes on the sale.