To sell an inherited property, you need to know the legal status and market value of the property and any financial implications you might face.
Selling an inherited property can seem like an intimidating process. Not only because there is often an emotional element to the sale, but also because there are various financial and practical considerations you have to think about too.
Often, selling an inherited property means you’re not entirely clued up on the status of the property, so you need to spend time and effort to find out everything about it.
If you’re selling an inherited property and want a quick sale, contact Swift Capital today on enquiries@swiftcapital.co.uk to discuss your position and get a no-obligation valuation.
How Do I Sell An Inherited Property?
There are many different steps involved in selling an inherited property.
Before you go ahead with the sale, you will need to:
1. Determine legal ownership and the status of the will
If a will was left, executors will likely have been named to handle the estate and manage the sale. If there is no will, it automatically transfers to the next of kin.
However, if there is no will but there is joint ownership, like with a married couple or a business partnership, it will automatically pass to the other owner.
If you are the named owner of the property, you can proceed with selling it.
2. Apply for probate.
If the estate is worth over £5000, you will need to apply for probate. This can take a considerable amount of time, but you can list a property for sale while the application is being processed.
This can also provide you with a valuation of the property, which is useful for informing the sale. It is worth noting, however, that the sale cannot be completed until probate has been granted.
3. Prepare the property.
Whether there are renovations needed to fix the property up, or it simply needs to be cleared and cleaned, factor this into your process. It always takes longer than you think!
4. Take it to the professionals.
Whether you go to an Estate Agent or a quick-buy company like Swift Capital, it’s worth getting legal advice on how to proceed with the sale. If it is particularly legally complex, a specialised probate solicitor will be able to help.
5. Check your taxes.
If the total value of the estate is worth more than £325,000, you will need to pay Inheritance Tax on the estate before the property is transferred to you. When you sell the property, if the sale price is higher than what the probate valued the property as at the date of death, you may need to pay Capital Gains Tax too.
If you’re selling an inherited property and want a simple sale, contact Swift Capital today.
How Much Does It Cost To Sell An Inherited Property?
Costs for selling an inherited property include legal advice, property management, outstanding mortgages, taxes and any other admin. These can influence why and when you decide to sell. And most of them can’t be avoided.
These costs also vary according to the value of the estate and what stage of the legal process you are at.
To give a general guide, the cost of selling an inherited property worth £400,000 can range from £6,000 to £35,000+, including taxes. This depends on the amount of legal support you need, what taxes are owed and if you need to complete any renovations.
Costs to factor into your spends include:
Inheritance Tax
This is paid by the estate before the property is transferred to you, which can reduce what you inherit. It applies to the total amount of the estate’s value, not just the property.
For an estate worth more than £325,000, the estate will be charged 40% inheritance tax on the amount above this threshold. If you’re managing the estate and the estate cannot afford the tax, the cost may fall to you.
Probate Fees
Probate is required for all estates valued over £5000. In short, probate is a legal process that involves sorting out the deceased’s estate.
To apply for probate, there is a standard fee of £273, and then there are either fixed or percentage fees, which can be 1-2% of the estate’s value. This process involves taking the will (if there is one), identifying who manages and distributes the estate, valuing the property, reporting it to HMRC (if the total estate value sits above £325,000), paying any inheritance taxes, and managing the sale.
Legal and Admin Costs
Between transferring ownership, having the property valued, and any fees surrounding the will if it isn’t accessible, costs can be between £1000-£3000+. Additionally, when it comes to selling an inherited property, other management costs can rack up too, including Estate Agent commissions or EPC certificates.
Property-Related Costs
Once probate is complete, the running cost of the property falls to the estate. The exact figure is conditional on many factors including council tax (though exemptions apply for some councils), utilities, home insurance (specific policies will be needed if the property is vacant) and maintenance, including gardening or repairs.
Mortgage or Debts
If there are outstanding debts or loans, these payments are still required to be paid off. Either by the estate, life insurance or by whoever has accepted inheritance of the property.
If you are selling the property, you can use this money to pay off any remaining mortgage costs.
How Long Do You Have To Sell An Inherited Property?
There is no time limit on when you can (or should) sell an inherited property. However, it is worth considering all the tax-related and practical factors that come with an inherited property, so you can implement a bit of a timeline.
Remember, selling a property takes time – so if you need to sell it quickly to release any funds, it’s important to get organised quickly.
If you are selling an inherited property and want a quick sale, contact Swift Capital today at enquiries@swiftcapital.co.uk.
How Much Tax Will I Pay If I Sell A House I Inherited?
This depends on the total value of the estate. There are three types of taxes that can apply when selling an inherited property.
Inheritance Tax: This is important to be aware of, but may have already been paid when you first inherited the property. If the value of the estate sits above £325,000, 40% tax is owed.
Capital Gains Tax: If the property is sold for more than what it was valued as at the date of death, you may be required to pay Capital Gains Tax. An annual allowance applies (£3,000 as of 2024-2025), and there are rates of 18% or 24% on all further gains.
Income Tax: This is separate to the sale itself, but if you rent out the property prior to selling, you will need to pay general income tax on any rental income. This is based on your personal tax band.
How To Avoid Inheritance Tax On An Inherited Property?
There is no way you can avoid paying inheritance tax, however, there are two reasons you might not have to pay it. This could be because the estate was passed to the joint owner (a spouse or civil partner) or to a charity or other initiative.
Or it could be because the estate is valued below the threshold of £325,000.
Can You Avoid Capital Gains Tax On An Inherited Property In The UK?
Whilst you can’t avoid paying capital gains tax, you might be able to use different methods to lower how much you owe. You could:
Use your Annual Allowance. £3,000 of your gain is exempt, so if the gain sits below this threshold no tax will be due.
Choose your timing. The amount you pay depends on your tax band, so it’s worth working out whether this will change anytime soon. Hold off on selling if you are going to take a career break or have a lower income year.
Consider the ownership of the property. You may be eligible for an exemption if you made the property your main residence prior to selling. Note, as of 2025, this applies only to the previous 9 months of ownership before selling. Also, it sometimes makes sense to transfer the property to your spouse or partner if your partner is in a lower tax band.
Work out your allowable costs. Any expense that surrounds the sale, e.g. estate agent or legal fees, can be deducted and reduce your taxable gain.
Do You Pay Capital Gains Tax On Inherited Property Abroad?
Yes, if you are selling an inherited property abroad, you may have to pay capital gains tax.
If you are a UK tax resident, you are required to pay UK Capital Gains Tax on all worldwide assets. This includes property you have inherited outside of the UK.
How Do I Transfer Ownership Of An Inherited Property?
You will need to complete the transfer through the Land Registry, providing all relevant documents such as the death certificate, Land Registry documents, and relevant tax forms.
If probate has been required, you will need to submit the grant to prove you have legal authority to transfer ownership.
The application is then submitted, which may require fees (dependent on your circumstances) and, if there is a mortgage, discussing options with the lender.
Selling An Inherited Property
Selling an inherited property can be a complicated process, especially if you need to work out its value and your tax liability.
If you have inherited a property and are thinking about selling it, speak to the team at Swift Capital today for a no-obligation valuation.