A parent leaves the family home to the children in equal shares. One sibling wants to sell straight away. Another wants to keep it, perhaps to live in, rent out, or simply because it was where they grew up. A third lives in Hong Kong or Singapore and just wants the matter finished fairly.
This is a common source of tension after a death. The law offers a clear set of options. This article explains them, focusing on Victoria and New South Wales, so siblings can decide together before anyone reaches for a court application.
Before distribution: the executor decides, not the siblings
While the estate is being administered, the property is usually held by the executor, not by the children. The siblings are beneficiaries. Their rights are to have the estate properly administered, not to control any single asset.
What the executor can do depends on the will:
- If the will directs the executor to sell and divide the proceeds, the executor will normally sell. A sibling who wants the house can bid for it at market value, but has no automatic right to it.
- If the will gives the property itself to the children, the executor can usually transfer it to them as co-owners, known as a transfer in specie.
- Most wills and the general law also give executors a power of sale, for example to pay debts and expenses or to divide the residue in practice.
Executors must act impartially. Where the executor is also a sibling, this is delicate: favouring their own preference invites challenge. A conflicted sibling-executor should get independent advice and keep careful records.
Option 1: sell and share the proceeds
Selling is often the cleanest outcome, especially where nobody can afford a buyout. Agree on the agent, auction or private sale, and the reserve or minimum price. If the estate sells, the executor decides after consulting the beneficiaries. If the siblings already hold title, they must all sign.
Option 2: one sibling buys out the others
A buyout can keep the property in the family. To work well it needs:
- An independent valuation, from a valuer the siblings agree on, or two valuations averaged. An agent’s appraisal is not a formal valuation.
- A clear structure. The buyout can sometimes be done within the estate, with the buying sibling taking the house as part of their share and the others receiving more cash, or after distribution, as a transfer between co-owners.
- Finance approval before the agreement is signed.
- A written agreement covering the price, timing, costs and what happens if finance falls through.
Stamp duty on a sibling buyout
Both Victoria and NSW have duty exemptions or concessions for transfers from an executor to a beneficiary that follow the will or intestacy rules. In Victoria this is in section 42 of the Duties Act 2000. In NSW it is in section 63 of the Duties Act 1997. However, if a sibling receives more than their entitlement and pays the others from their own money, duty may be charged on the part they are effectively buying. In NSW, foreign beneficiaries may also face surcharge purchaser duty on that portion. Structure matters, so get advice before signing.
Option 3: keep it together
Some siblings keep the property as co-owners, usually as tenants in common. This works only with clear rules: a co-ownership agreement covering management, rent and costs, decision-making, and how one sibling can exit later, including how the price is set.
Rent and occupation by one sibling
Disputes often begin when one sibling is already living in the property. Whether they should pay rent, and whether they can claim for repairs or improvements, depends on the stage of the estate and the facts. We discuss a beneficiary living in an estate property in a separate article. Once the siblings are co-owners in Victoria, the Property Law Act allows VCAT to adjust accounts between co-owners for matters such as improvements, maintenance, rates, insurance and rent.
When siblings cannot agree: court-ordered sale
If the siblings are co-owners and cannot agree, any co-owner can apply for an order:
- Victoria: Part IV of the Property Law Act 1958 allows a co-owner to apply to VCAT. VCAT can order a sale and division of the proceeds, a physical division, or a combination. The Act states that sale and division of proceeds is preferred, and VCAT can also order compensation and adjust accounts between co-owners.
- NSW: section 66G of the Conveyancing Act 1919 allows the Supreme Court to appoint trustees for sale, who sell the property and distribute the proceeds. The court’s discretion to refuse is limited.
- Other states and territories have similar powers for courts or tribunals to order a sale or division of co-owned land.
These processes apply to co-owners. While the property is still in the executor’s name, disagreements are usually about the executor’s administration of the estate, and go to the Supreme Court if they cannot be resolved.
Litigation is slow and costly, and the costs often come out of the sale proceeds. Many co-ownership disputes settle along the way, and an early agreement usually costs far less.
Mediation
Many sibling disputes are not really about the house, but about fairness, a parent’s care in the final years, or old family dynamics. Mediation gives each sibling a confidential setting to be heard and to test options such as a buyout, a delayed sale or a lease. Siblings overseas can join online.
Tax in general terms
- Capital gains tax: a main residence exemption may apply if an inherited dwelling is sold within two years of death, subject to conditions. We explain the two-year rule in a separate article. Outside that window, a sale or a buyout can trigger CGT for the sibling selling their share.
- Changes from 1 July 2027: under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, the 50% CGT discount is replaced by indexation plus a 30% minimum tax for gains accruing after that date. The timing of a sale may therefore matter.
- Foreign resident withholding: since 1 January 2025, a buyer must withhold part of the price on any sale of Australian real property unless the seller provides an ATO clearance certificate.
Get advice from a qualified tax adviser.
Overseas siblings
A sibling’s tax residency can change their CGT position and how withholding applies. Overseas siblings will also need to sign transfer documents, agreements and statutory declarations abroad, often before a notary public, so build in time for this.
Steps for siblings who disagree
- Read the will. Is there a direction to sell, or a gift of the property itself?
- Get an independent valuation early, so everyone works from the same number.
- Ask each sibling what they actually want: cash, the house, time or recognition.
- Agree on interim arrangements for occupation, rent and outgoings.
- Try a facilitated family meeting or mediation before any court or VCAT application.
- Record any agreement in writing and structure the transfer with duty in mind.
Frequently asked questions
Can my sibling force the sale of an inherited house?
Once siblings are co-owners, generally yes. In Victoria a co-owner can apply to VCAT under the Property Law Act, and in NSW to the Supreme Court under section 66G of the Conveyancing Act. Before distribution, the executor decides whether to sell, within the terms of the will.
Can one sibling buy out the others?
Yes, if everyone agrees on the price and the buyer can fund it. Use an independent valuation and a written agreement, and check the duty and CGT consequences before choosing the structure.
Does a sibling living in the inherited house have to pay rent?
It depends on the will, the stage of the estate and any agreement. Between co-owners in Victoria, VCAT can take rent, occupation and improvements into account when dividing the proceeds.
How Chua Tan Associates can help
Chua Tan Associates advises executors and siblings on inherited property: reading the will, structuring buyouts and transfers with duty and tax in mind, documenting co-ownership arrangements, and applying to VCAT or the Supreme Court where needed. Justin Chua is a Nationally Accredited Mediator and Family Dispute Resolution Practitioner and can help siblings reach an agreement before positions harden. Our notary public can assist siblings who need documents signed for use overseas. We assist clients across Australia and overseas, work with local lawyers where family members live abroad, and advise in English, Mandarin and Cantonese.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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