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Do I pay capital gains on inherited property?

Not on inheriting it. The estate pays tax on the gain up to the date of death; you pay on any gain after you receive it.

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Not on inheriting it. The estate pays tax on the gain up to the date of death; you pay on any gain after you receive it.

The Canadian position

Your cost base is generally the fair market value at the date of death.

Selling soon after inheriting therefore usually produces little further gain.

The Islamic position

The estate's tax is a debt paid before the shares are calculated.

Your own later gain is your own affair, not the estate's.

Researched — the four schools agree

All four schools work through the estate in the same order: the cost of preparing and burying the body, then debts, then bequests up to one third, and only what is left is divided by the fixed shares. The disputes are not about the sequence but about two rankings inside it.

All four Sunni schools researched and sourced. Reviewed 2026-08-19. Full positions, evidence and sources — The order of payment out of an estate.

Note

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Citations & sources

Every factual claim on this page traces to a source below. Details change — check the original source before relying on any figure, fee or legal position. Anything under “further reading” is related material, not a source for what is stated here.

Canadian legislation & government
  1. What to do when someone has died — Canada Revenue Agency
  2. Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
  3. Principal residence exemption — Canada Revenue Agency
Further reading — Treadstone Law
  1. Cottage capital gains tax death ontario — Treadstone Law
  2. Selling an inherited property before probate ontario — Treadstone Law
  3. Estate trustee selling real estate below market value ontario — Treadstone Law
  4. Selling inherited property as is executor disclosure ontario — Treadstone Law
  5. Wills & estates practice — Treadstone Law