Inheritance and Succession Rules for Real Estate in New South Wales

Forced Heirship and Family Provision Claims

Australia does not have forced heirship rules. Property owners in New South Wales (NSW) possess testamentary freedom, meaning a property owner can dispose of Sydney real estate to any beneficiary named in a valid will. However, this freedom is subject to statutory family provision legislation.

Under Chapter 3 of the Succession Act 2006 (NSW), the Supreme Court of New South Wales can alter the distribution of a deceased estate if an eligible person makes a successful family provision claim. Under Section 57 of the Succession Act 2006 (NSW), eligible persons include:

• The surviving spouse or de facto partner at the time of death.
• Children of the deceased.
• A former spouse who has not remarried.
• A person who was dependent on the deceased and was a grandchild or a member of the deceased's household.
• A person living in a close personal relationship with the deceased at the time of death.

If the court decides that the deceased failed to make adequate provision for the applicant's proper maintenance, education, or advancement in life, it can order that a portion of the Sydney property (or proceeds from its sale) be allocated to that claimant. An application must be filed within 12 months of the date of death under Section 58 of the Succession Act 2006 (NSW).

Matrimonial Property and Co-Ownership Structures

Property succession in Sydney depends directly on how title is held on the Torrens title register managed by NSW Land Registry Services (NSW LRS):

• Joint Tenants: Upon the death of one joint tenant, the deceased person's interest automatically passes to the surviving joint tenant by the right of survivorship under the Real Property Act 1900 (NSW). The property does not form part of the deceased estate, is not distributed via the will, and is shielded from probate administration. The survivor registers the change by submitting a Notice of Death form to NSW LRS.
• Tenants in Common: Each owner holds a distinct percentage share in the property. Upon death, the deceased person's share passes into their estate and is distributed according to their will or the statutory rules of intestacy.

Under Australian family law, a surviving spouse does not automatically receive real estate held solely in the deceased spouse's name, but they remain an eligible person to claim under the Succession Act 2006 (NSW) or seek orders in the Federal Circuit and Family Court of Australia.

Recognition of Foreign Wills in New South Wales

A foreign will is legally recognised in NSW under Sections 48 and 49 of the Succession Act 2006 (NSW) if its execution conforms to the law of the place where it was executed, or where the testator was domiciled or habitually resident at execution or death.

However, a foreign executor cannot deal directly with Sydney real estate using foreign probate documents alone. The foreign grant of probate must be formally validated locally:

• Reseal of Probate: If probate was granted in a recognized jurisdiction (such as the United Kingdom, New Zealand, or specified Commonwealth nations), the executor applies to the Supreme Court of New South Wales under the Probate and Administration Act 1898 (NSW) for a Reseal of Probate. Once resealed, the foreign grant has the same legal force in NSW as a local grant.
• Fresh Grant of Probate: If the foreign grant originates from a non-Commonwealth jurisdiction (such as the United States or continental European nations), the executor must apply directly to the Supreme Court of New South Wales for a primary Grant of Probate, providing certified translations and evidence of foreign law where applicable.

Estate Taxes, Stamp Duty, and Capital Gains Tax

Australia has no estate duties, death taxes, or inheritance taxes at either the federal level or state level (NSW abolished state death duties in 1979).

Transfer Duty (Stamp Duty)

When real estate passes directly from a deceased estate to a beneficiary in accordance with a valid will or intestacy rules, full ad valorem transfer duty does not apply. Under Section 63 of the Duties Act 1997 (NSW), a flat concessional transfer duty of $50 applies to the transaction. Revenue NSW must stamp the transmission document before registration at NSW LRS.

Capital Gains Tax (CGT)

Capital Gains Tax is a federal tax administered by the Australian Taxation Office (ATO). The transfer of Sydney property from a deceased person to their legal personal representative (LPR) or directly to an Australian-resident beneficiary does not trigger an immediate CGT event due to statutory rollover relief.

However, tax obligations arise upon future sale:

• Pre-CGT Property (acquired before 20 September 1985): The beneficiary's cost base is the market value of the property as at the date of death.
• Post-CGT Property (acquired on or after 20 September 1985): The beneficiary inherits the deceased's original cost base.
• Non-Resident Beneficiaries: Non-resident tax beneficiaries inheriting Sydney real estate inherit the asset subject to Australian capital gains tax when sold. Non-resident owners are ineligible for the standard 50% CGT discount for capital gains accrued after 8 May 2012 and cannot claim the main residence exemption.

Process and Timeframe for Transferring Title

Transferring real estate title in Sydney following death requires a structured multi-step procedure:

1. Death Registration: Obtain an official Death Certificate from the NSW Registry of Births Deaths & Marriages. 2. Public Notice: The executor lodges a Notice of Intended Application for Probate on the Supreme Court of NSW Online Registry. A mandatory 14-day waiting period must pass before formal filing. 3. Probate Lodgement: The executor submits the Summons for Probate, original Will, Inventory of Property (Form 117), and executor's affidavit to the Supreme Court of New South Wales. Court processing takes between 2 and 8 weeks. 4. Tax Stamping: The transfer document is lodged with Revenue NSW to pay the $50 concessional duty under Section 63 of the Duties Act 1997 (NSW). 5. Land Registry Transmission: The legal personal representative or beneficiary lodges a Transmission Application (Form 03AD for beneficiaries or Form 03AE for executors) with NSW Land Registry Services via the Property Exchange Australia (PEXA) electronic conveyancing platform. Title updates within 2 to 4 weeks.

The entire process from death to registered title transfer typically takes between 3 and 9 months. Executors frequently delay final asset distribution until 6 months after death to protect against personal liability from unknown family provision claims.

Real Estate Held Through a Company Structure

Where Sydney property is owned by an Australian proprietary limited company (Pty Ltd), the legal title of the property remains registered in the company name with NSW Land Registry Services. The property itself does not form part of the deceased's personal estate.

Instead, the deceased's shares in the company pass under the will:

• Corporate Governance: Share transfers are governed by the Corporations Act 2001 (Cth) and the company's constitution. Probate or a Reseal of Probate from the Supreme Court of NSW must be provided to the company directors to register the transfer of shares to the beneficiary.
• Sole Director and Shareholder: Under Section 201F of the Corporations Act 2001 (Cth), if a single director and shareholder dies, their legal personal representative can appoint a temporary or permanent replacement director to maintain company operations, handle real estate assets, and manage property transfers.
• Reporting: The company must update its legal share register and lodge a notification of changes with the Australian Securities and Investments Commission (ASIC) within 28 days of the share transfer.