Dwelling House Exemption 2026: Inherit Property Tax-Free
The dwelling house exemption is the most valuable tax relief available to property inheritors. If you qualify, the entire value of the property is exempt from Capital Acquisitions Tax — potentially saving €50,000–€200,000+ in tax. Here’s how to qualify.
The Three Conditions
- You lived in the property for at least 3 continuous years immediately before the date of inheritance, as your principal private residence
- You do not own or have an interest in any other residential property at the date of inheritance (anywhere in the world)
- You continue to live in the property for at least 6 years after inheriting it (with some exceptions for illness, disability, or where a replacement dwelling of equal or lesser value is acquired)
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Common Disqualifiers
- You own a buy-to-let property — even a small apartment
- You lived in the property but moved out 2 years before the parent’s death
- You sell the inherited property within 6 years of inheritance
- You were a joint owner of another property (even with a partner)
The 6-year rule is strict. If you sell the inherited property or move out within 6 years, the exemption is clawed back and you owe the full CAT. The only exceptions are if you require long-term care, or if you sell and buy a replacement of equal or lesser value.
Worked Example
You inherit your parents’ Dublin house worth €500,000. You’ve lived there for 5 years. You own no other property. Without the exemption, CAT on €500,000 (Group A threshold ~€400,000) would be 33% × €100,000 = €33,000. With the exemption, you pay €0.
Calculate your inheritance tax with and without exemption: Inheritance Tax Calculator