Inheritance Tax on Property in Ireland — Complete Guide
Inheriting property in Ireland triggers Capital Acquisitions Tax (CAT) at 33%, plus potential Capital Gains Tax if you later sell. The tax-free thresholds, reliefs, and exemptions can reduce or eliminate the bill — but only if you know about them.
How Capital Acquisitions Tax (CAT) Works
When you inherit property (or any asset) in Ireland, you pay 33% CAT on the value above your tax-free threshold. The threshold depends on your relationship to the person who died:
| Group | Relationship | Threshold (2026) |
|---|---|---|
| Group A | Child (including adopted, stepchild, foster child in certain cases) | €400,000 |
| Group B | Parent, sibling, niece/nephew, grandchild, lineal ancestor | €40,000 |
| Group C | Everyone else (cousin, friend, partner) | €20,000 |
Worked Example: Inheriting a Family Home
Sarah inherits her mother’s Dublin home, valued at €550,000. She previously received €50,000 from her parents for her own house deposit.
- Group A threshold: €400,000
- Previous benefits used: €50,000
- Remaining threshold: €350,000
- Taxable amount: €550,000 − €350,000 = €200,000
- CAT payable: €200,000 × 33% = €66,000
Dwelling House Relief — The Big Exemption
This is the relief that can eliminate your entire CAT bill. If you inherit a property that was the deceased’s main home AND you meet certain conditions, the inheritance is completely exempt from CAT:
- You must have lived in the property as your main home for 3 years before the inheritance
- You must not own or have an interest in any other residential property at the date of inheritance
- You must continue to live in the property as your main home for 6 years after (unless you’re over 65 or move to a nursing home)
This relief is particularly relevant for adult children who have been living with and caring for a parent. It applies regardless of the property value — a €1 million house can be inherited completely tax-free if the conditions are met.
Capital Gains Tax If You Sell
If you later sell the inherited property, you may owe Capital Gains Tax (CGT) at 33% on the gain since the date of inheritance. The “base cost” is the market value at the date of death (the same value used for CAT).
If you inherit a property worth €400,000 and sell it two years later for €430,000, your CGT is: (€430,000 − €400,000 − €1,270 annual exemption) × 33% = €9,481.
If the property is your principal private residence for the entire period you own it, it’s exempt from CGT.
Agricultural Relief and Business Relief
If the inherited property is farmland and you qualify as a “farmer” (80%+ of your assets are agricultural after inheritance), the taxable value is reduced by 90%. This means a €500,000 farm is assessed as €50,000 for CAT purposes.
Business Relief similarly reduces the taxable value of qualifying business property by 90%. This can apply to commercial property that’s part of a business.
Practical Steps When You Inherit Property
- Get a professional valuation at the date of death — this sets both your CAT liability and your CGT base cost
- Get a BER assessment — you’ll need this to sell or rent the property
- Check your lifetime threshold — add up ALL previous gifts and inheritances from that group
- Claim all available reliefs — Dwelling House, Agricultural, Business, or Small Gift exemptions
- File the IT38 return within 4 months of the “valuation date” (usually date of death)
- Consider the property’s future — if planning to sell, check SEAI grant eligibility for upgrades that could increase value at HomeEnergyGuide.ie
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