Australian Journal of Political Science, Vol. 36, No. 1, pp. 83– 100 The Impact of Housing Inheritance on the Distribution of Wealth in Australia LISEL A. O’DWYER Flinders University Home ownership has enabled most Australian households to accumulate signif- icant wealth. Does the transfer of this wealth via inheritance offer a significant capital gain to beneficiaries and how does it influence the distribution of wealth? Data are presented showing the value of wealth at death before and after it is divided amongst beneficiaries. Particular attention is paid to how wealth varies between various categories of wealth-holders, before considering the role of housing in wealth at death and the value of the wealth inherited by beneficiaries. The timing and composition of inherited wealth is an important factor in its impact. However, it is concluded that inherited wealth has little effect on the distribution of wealth in society although it may have significant influences on the life-course of some individuals. Introduction Society can subject the distribution of wealth to whatever rules it thinks best: but what practical results will flow from the operation of those rules must be discovered, like any other physical or mental truths, by observation and reasoning. (Mill 1909 [1870], Book 2, ch. 1) The impact of inheritance on the intergenerational transmission of wealth and the distribution of wealth are central questions in the debate about social polarisation and wealth inequality in Australia. It has long been suspected that the impact of inheritance on wealth distribution would have a more marked effect in Australia than in most other Western countries because of the longstanding tradition of home ownership and the fact that housing forms the bulk of the average Australian household’s assets. The transfer of this wealth, accumulated mainly through home ownership, has become known in the housing and urban studies literature as ‘housing inheritance’, although it does not actually differ in kind from the usual process of inheritance. The issue has come to the fore in both the public policy and housing studies arenas, because we are now at the stage when the first generations of Australian mass home ownership are reaching the end of their life-course and their accumulated wealth is being transferred via inheritance. The aim of this paper Lisel A. O’Dwyer is a Post-doctoral Research Fellow in the School of Geography, Population and Environmental Management at Flinders University. The housing inheritance study formed her doctoral thesis, which was funded by a Commonwealth governmentscholarship.Dr O’Dwyer’s researchinterests centre on the political economy of housing as well as health issues as related to housing and urban life. ISSN 1036-1146 print/ISSN 1363-030X online/01/010083-18 Ó 2001 Australasian Political Studies Association DOI: 10.1080/10361140020032205