diff --git a/idea/src/org/jetbrains/kotlin/idea/inspections/CanBePrimaryConstructorPropertyInspection.kt b/idea/src/org/jetbrains/kotlin/idea/inspections/CanBePrimaryConstructorPropertyInspection.kt
index 87128b2feb2..aa57a72de59 100644
--- a/idea/src/org/jetbrains/kotlin/idea/inspections/CanBePrimaryConstructorPropertyInspection.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/inspections/CanBePrimaryConstructorPropertyInspection.kt
@@ -27,6 +27,7 @@ import org.jetbrains.kotlin.descriptors.ValueParameterDescriptor
 import org.jetbrains.kotlin.idea.caches.resolve.analyzeFully
 import org.jetbrains.kotlin.idea.util.CommentSaver
 import org.jetbrains.kotlin.psi.*
+import org.jetbrains.kotlin.psi.psiUtil.containingClassOrObject
 import org.jetbrains.kotlin.psi.psiUtil.getAnnotationEntries
 import org.jetbrains.kotlin.resolve.BindingContext
 import org.jetbrains.kotlin.resolve.DescriptorToSourceUtils
@@ -56,6 +57,8 @@ class CanBePrimaryConstructorPropertyInspection : AbstractKotlinInspection() {
                 if (nameIdentifier.text != assignedDescriptor.name.asString()) return
 
                 val assignedParameter = DescriptorToSourceUtils.descriptorToDeclaration(assignedDescriptor) as? KtParameter ?: return
+                if (property.containingClassOrObject !== assignedParameter.containingClassOrObject) return
+
                 holder.registerProblem(holder.manager.createProblemDescriptor(
                         nameIdentifier,
                         nameIdentifier,
diff --git a/idea/testData/inspections/canBePrimaryConstructorProperty/properties.kt b/idea/testData/inspections/canBePrimaryConstructorProperty/properties.kt
index 4f91ce95c76..139b0782f61 100644
--- a/idea/testData/inspections/canBePrimaryConstructorProperty/properties.kt
+++ b/idea/testData/inspections/canBePrimaryConstructorProperty/properties.kt
@@ -31,4 +31,17 @@ class Incorrect(val property: String, withGetter: Double, withSetter: Int, diffe
 // For data class inspection also should not work
 data class Data(name: String) {
     val name = name
+}
+
+// Case from KT-12876: also should not work, property lives in different class here
+interface Foo {
+    val x : String
+}
+
+class Bar(x : String) {
+    init {
+        object : Foo {
+            override val x = x // Property is assigned to parameter, can be declared in ctor
+        }
+    }
 }
\ No newline at end of file