It's always difficult when a loved one passes away – there's the grief you feel and then there's the complicated matter of dealing with any property you inherit.
Inheriting property comes with a lot of responsibility and there is a lot you need to consider financially, especially if you own other property too.
In this article, we've endeavoured to make the whole process a little more understandable, although it's always important that you seek professional guidance.
Understanding the Will
If you have inherited a property and you decide to put it up for sale, the first thing you need to consider is the deceased person's Will. If there isn't a Will, or the deceased person didn't let anyone know where they left their final wishes, you should seek the advice of a solicitor.
From the Will, you will need to establish whether or not you are an executor. An executor is someone who can legally deal with the deceased person's estate. You should bear in mind that there may be multiple executors. If you are an executor, it is your responsibility to organise probate – more on that later.
The deceased person may have left specific instructions detailing how they wanted their estate to be divided up. For example, perhaps they wanted a percentage to be left to their grandchildren or a much-loved charity. As executor, it's your responsibility to ensure their wishes are carried out.
As an executor of a deceased person's Will, you will need to apply for probate. This is a legal process that gives you authority to handle the estate of someone who has passed away and it can take up to 12 months to complete.
Applying for probate can be a complicated undertaking, requiring the provision of numerous documents and pieces of information. It's never a good idea to try and go through this process alone – especially at such a difficult time. We recommend that you instruct a solicitor to help you through probate to ensure that everything is done correctly. A solicitor can advise you throughout the process and tell you what you need to do.
It's important to remember that through probate, you as an executor will be responsible for handling any taxes, bills or debts linked to the estate.
The Costs Involved When You Sell Inherited Property
As with any house sale, there are many costs to consider. However, you may find there are more if the inherited property isn't your only house.
If you wish to sell inherited property, you might decide to use an estate agent to help you. This can be an excellent choice for many people because the estate agent will take on much of the responsibility. Dealing with a house sale when a loved one has passed away can be challenging, but an estate agent can handle the marketing, take photos, show potential buyers around and negotiate the sale price.
Estate agents usually do great work, but they are expensive, with most taking up to 3% of the final sale price as commission. What's more, if your inherited property is in a state of disrepair or in need of an update, selling through an estate agent may take a long time. Using a cash property buyer allows you to sell your house fast, since we are happy to buy most houses in any condition.
All the bills and expenses for the property will need to be dealt with on an ongoing basis until the inherited house is sold. If you are the executor, you will need to contact water, gas and electric providers as well as the local council to advise them that you are their new contact.
You will also need to check if there is still an outstanding mortgage on the property. If that's the case, you will need to cover the payments until the estate has been dealt with.
Inheritance and Capital Gains Tax
You may be liable to pay Inheritance Tax on a property you inherit. The rate is currently 40% of the property's value, but there are different allowance thresholds depending on the circumstances.
If you inherit a property that is valued over £325,000, you will be liable to pay 40% Inheritance Tax on anything over that threshold. If you are a child or grandchild of the deceased, you will only need to pay inheritance tax on the value over £425,000. For example, if a parent passes away and you inherit their property valued at £500,000, you will only be liable to pay tax on £75,000.
You can use the money from the sale of the inherited property to pay for the Inheritance Tax, but if this is your second property, you may need to pay Capital Gains Tax too.
Capital Gains Tax applies to the profit you make from selling a large asset such as a property that isn't your primary residence. In some instances, you may be exempt from paying Capital Gains Tax, but in any case, there are ways in which you can avoid it.
Get the Help You Need to Sell an Inherited Property Quickly
Selling an inherited property is challenging. It can be even more stressful than selling a primary residence because there are so many taxes and legal processes to consider, besides the fact that a loved one has sadly passed away.
That's why many people choose to sell an inherited property to a specialist fast house buyer like Zoom. With us, you don't need to worry about expensive estate agent fees or the property sale taking a long time. We buy houses regardless of what condition they are in, and we can complete the process very quickly.
Take the stress out of dealing with an inherited property by giving us a call on 03338804362 or completing our online form today. A member of our friendly team will be in touch shortly to discuss the sale process.