Family Home Inheritance in Cork — The Dwelling House Exemption

For most Cork families, the family home is the most valuable asset in the estate. Passing it to the next generation without careful planning can result in a significant Capital Acquisitions Tax (CAT) bill — but the dwelling house exemption can eliminate this liability entirely for qualifying beneficiaries.

What Is the Dwelling House Exemption?

The dwelling house exemption allows a beneficiary to inherit a residential property completely free of CAT, provided certain conditions are met.

Conditions for the Dwelling House Exemption

To qualify for the exemption, the beneficiary must:

1. Have occupied the property as their only or main residence for the 3 years immediately before the inheritance
2. Not own any other residential property at the date of the inheritance
3. Continue to occupy the property as their main residence for 6 years after the inheritance (unless over 65, or unable to continue due to physical or mental infirmity)

Example — Cork Family Home

A Cork parent owns a house worth €420,000. Their adult child (aged 35) has lived with them for the past 4 years while caring for the parent, does not own any other property. On the parent's death, the child inherits the house — using the dwelling house exemption, the entire €420,000 is exempt from CAT. Without the exemption, using the Group A threshold of €335,000, the child would face a CAT bill of €28,050 (33% × €85,000).

Planning for the Dwelling House Exemption

For the exemption to apply, the beneficiary must have lived in the property continuously for 3 years before the inheritance. This cannot be engineered at the last minute. Planning involves:

• Identifying which family member is most likely to live in the family home and qualify
• Ensuring they are not an owner of another property
• Structuring the will to maximise the exemption
• Considering what the other children receive to ensure fairness

Joint Ownership and the Family Home

Property held as joint tenants passes automatically to the surviving joint owner — no probate required, and no CAT between spouses. However, on the second death, the full property value forms part of the survivor's estate and may be subject to CAT when passing to children.

The Family Home and the Spouse's Legal Right

A surviving spouse has a statutory right under Section 56 of the Succession Act to have the family home appropriated in or towards their legal right share. This protects the family home for the spouse regardless of what the will says. See: Spouse's Inheritance Rights Ireland.

Get Expert Advice in Cork

Property values in Cork have risen significantly, making the dwelling house exemption more valuable than ever. A Cork estate planning solicitor helps you structure the family home inheritance to maximise available exemptions. See: Estate Planning Cork.