Dealing with a property you’ve inherited can be difficult – especially when this comes at a time of grief. Here, we break down the process to help you sell a house that you’ve inherited.
First steps to sell your inherited property
There are a few first steps to take when you’ve inherited a property that will help the process run smoothly further down the line.
Firstly, if there’s still a mortgage or loans against the property, contact the lenders to let them know that the previous owner has passed away. They may still require you to make payments, or they might offer you a payment holiday.
You should also visit the property and ensure that there are no immediate maintenance problems that need addressing, such as leaks or security issues.
Taxes on inherited property
There are three taxes associated with inheriting a property: inheritance tax, capital gains tax, and income tax.
Inheritance tax must be paid on the entire estate, which includes property, belongings, and finances if the value is over £325,000. The threshold is £475,000 if you’re inheriting from parents or grandparents.
You will pay 40 per cent tax on anything over the threshold. If you’re inheriting the entire estate of a deceased spouse or civil partner, you won’t need to pay inheritance tax.
Capital gains tax
When you sell a property that isn’t your primary residence, you’ll usually need to pay capital gains tax. This includes paying tax on any income you’ve made from renting the property out, if you choose to do this.
You will have a personal capital gains tax allowance which will reduce the amount you owe. You can deduct reasonable expenses, such as maintenance and selling costs, too.
If you use your inherited property to make an income, such as renting it out, you will need to pay income tax. This will mean you’ll need to complete an annual Self-Assessment with HMRC.
Before you sell an inherited property, you should check to ensure that there’s a will confirming who the deceased wanted to leave the property to. When this has been settled, you’ll need to apply for probate which gives you the legal authority to deal with the estate.
Once you have legally had your relationship with the property established, you’ll be able to go ahead with the sale.
Let property experts handle the sale for you
Once you’re ready to list your inherited property, contact a trusted, local estate agent to take care of the sale. If your property is in the Andover or Whitchurch area, Graham & Co will carry out a free, no-obligation valuation.
When you decide to list with us, your dedicated agent will manage the sale on your behalf. They will advise you on the asking price, carry out all viewings and help you navigate offers. Once a sale is agreed upon, your agent will oversee all paperwork and make sure everything is in place for a smooth sale.
If you’ve inherited a property that you’re looking to sell, contact our friendly team today.