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What happens down the road when property tax is not paid and the house is inherited?

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I understand that you can defer your property tax but in the process you have to pay some sort of interest, possibly 4% on the sums involved until it is paid?
If a person decides to do this and the arrears build up to a substantial amount over a number of years and when the property is inherited by the next of kin, is CAT paid on the gross value of the property or on the value of the property after the accumulated property tax has been paid?

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