If a property is inherited and the inheritor has and still intends to live in said property, does the capital gains tax still apply?

Capital Gains taxes apply to all properties subject to the owners ability to qualify for the Principal Residence Designation. The inherited property will be transferred to the beneficiary at an Adjusted Cost Base (often the fair market value on the date of death) for the purposes of determining future Capital Gains.  The ACB should be determined by the Estate and reported on the final return or optional tax return of the deceased.