diff --git a/pyrefly/lib/alt/class/class_field.rs b/pyrefly/lib/alt/class/class_field.rs
index 6b7e30e146..840f9cb237 100644
--- a/pyrefly/lib/alt/class/class_field.rs
+++ b/pyrefly/lib/alt/class/class_field.rs
@@ -718,6 +718,18 @@ impl ClassField {
         matches!(&self.0, ClassFieldInner::InstanceAttribute { .. })
     }
 
+    /// Returns true if this field can have the `@override` decorator applied to it.
+    pub fn can_have_override_decorator(&self) -> bool {
+        match &self.0 {
+            ClassFieldInner::InstanceAttribute { .. }
+            | ClassFieldInner::NestedClass { .. }
+            | ClassFieldInner::ClassAttribute { .. } => false,
+            ClassFieldInner::Property { .. }
+            | ClassFieldInner::Descriptor { .. }
+            | ClassFieldInner::Method { .. } => true,
+        }
+    }
+
     pub fn ty(&self) -> Type {
         match &self.0 {
             ClassFieldInner::Property { ty, .. } => ty.clone(),
@@ -862,7 +874,7 @@ impl ClassField {
         }
     }
 
-    fn is_class_var(&self) -> bool {
+    pub fn is_class_var(&self) -> bool {
         match &self.0 {
             ClassFieldInner::Property { .. } => false,
             ClassFieldInner::Descriptor { annotation, .. } => {
@@ -3067,7 +3079,11 @@ impl<'a, Ans: LookupAnswer> AnswersSolver<'a, Ans> {
         // Check for missing @override decorator when overriding a parent attribute.
         // This error is emitted when a method overrides a parent but doesn't have @override.
         // Since this error has Severity::Ignore by default, it won't be shown unless enabled.
-        if !is_override && parent_attr_found && !parent_has_any {
+        if !is_override
+            && parent_attr_found
+            && !parent_has_any
+            && class_field.can_have_override_decorator()
+        {
             self.error(
                 errors,
                 range,
diff --git a/pyrefly/lib/test/class_overrides.rs b/pyrefly/lib/test/class_overrides.rs
index fb78e4c171..1fc53e16f1 100644
--- a/pyrefly/lib/test/class_overrides.rs
+++ b/pyrefly/lib/test/class_overrides.rs
@@ -912,7 +912,7 @@ def f(d: D):
 
 // Tests for MissingOverrideDecorator (strict override enforcement)
 testcase!(
-    test_missing_override_decorator,
+    test_missing_override_decorator_method,
     TestEnv::new().enable_missing_override_decorator_error(),
     r#"
 class Base:
@@ -1000,7 +1000,7 @@ class Base:
     x: int
 
 class Derived(Base):
-    x: int  # E: Class member `Derived.x` overrides a member in a parent class but is missing an `@override` decorator
+    x: int
     "#,
 );
 
@@ -1043,3 +1043,45 @@ class Derived(Base):
     def __str__(self) -> str: ...  # E: overrides a member in a parent class but is missing an `@override` decorator
     "#,
 );
+
+testcase!(
+    test_missing_override_decorator_instance_attribute,
+    TestEnv::new().enable_missing_override_decorator_error(),
+    r#"
+class A:
+    def __init__(self):
+        self.a = 1
+
+class B(A):
+    def __init__(self):
+        self.a = 2  # OK - instance attribute, not a method override
+    "#,
+);
+
+testcase!(
+    test_missing_override_decorator_nested_class,
+    TestEnv::new().enable_missing_override_decorator_error(),
+    r#"
+# Nested classes cannot have the @override decorator applied to them.
+class A:
+    class C: pass
+
+class B(A):
+    class C(A.C): pass  # OK - nested class, @override cannot be applied
+    "#,
+);
+
+testcase!(
+    test_missing_override_decorator_classvar,
+    TestEnv::new().enable_missing_override_decorator_error(),
+    r#"
+from typing import ClassVar
+
+# ClassVars cannot have the @override decorator applied to them.
+class A:
+    x: ClassVar[int]
+
+class B(A):
+    x: ClassVar[int]  # OK - ClassVar, @override cannot be applied
+    "#,
+);