Selling an inherited property can feel daunting, especially when you are dealing with grief at the same time.
It’s important to understand the process, so we have broken it down into an easy guide.
What to do before selling an inherited property
Check what mortgages and loans are still in place and contact the lender to let them know the situation. They may ask that payments continue, but might offer you a payment holiday.
Visit the property if possible, and check its condition. If there is any essential maintenance to be done, which is likely if it has been empty for a period, arrange for this to be carried out.
Ensure there is a buildings insurance policy in place, and that the insurers are made aware if the property is unoccupied.
Find out if the deceased person left a will, specifying how they wanted their estate to be divided up. Whether there is a will in place or not, you will need to apply for probate, a legal process that gives you authority to deal with the person’s financial assets – including property.
Taxes on inherited property
It’s crucial to be clear on what taxes, if any, you will need to pay when selling an inherited property. There are three types that could apply:
Inheritance tax
In England and Wales, inheritance tax of 40% is usually paid on the deceased person’s estate, if its value is over £325,000, or £475,000 if you are inheriting from parents or grandparents. You only need to pay tax on the portion of the estate over this threshold, and if you’re inheriting the estate from a spouse or civil partner, you won’t need to pay inheritance tax at all.
Capital gains tax
This is a tax paid on any profits you have made from a property that is not your primary residence, for example by keeping it and renting it out, or selling it later for a higher price than its value at the time you inherited it.
The best way to avoid paying capital gains tax on an inherited property is to sell it straight away, before it has increased in value.
Income tax
You may have to pay income tax to HMRC on an inherited property, if you use it to make money, for example by letting it rather than selling it.
How to sell an inherited property
When putting an inherited property on the market, why not give yourself a break from the stress and let an expert take the reins? A top local estate agent, such as Carter & May, can give you peace of mind by providing a free valuation and then handling the sale on your behalf.
The property may be far from your home, or in an area unfamiliar to you. But choosing a local agent means you can benefit from their knowledge of the area and its housing market. As well as helping the property achieve the best price, this also means the agent will be on hand to carry out viewings and help oversee the paperwork once a sale has been agreed.
If you’re looking to sell a property you’ve inherited, contact the Carter & May team today.