Lawyers for Selling an Inherited Property
How to Sell a House You’ve Inherited
When you inherit a house, there are many questions you need to ask yourself, such as:
- Should you sell the property you’ve inherited or keep it?
- Is there still a mortgage on the property?
- What if it’s been left to you and another sibling jointly?
Plus, you will also need to consider the legal aspects such as stamp duty, inheritance tax, and capital gains tax.
What Steps Do You Need to Take After Inheriting a Property?
1. Find Out Whether There Is a Will
The first thing you will need to do with an inherited property is establish whether the person who passed away has left a will. The will outlines who is named as a beneficiary and who is named as an executor. If there is not a will, the next of kin can apply for a ‘grant of administration’ to prove they have the legal right to deal with the estate.
2. Going through Probate
Probate is the legal process of administering the estate following the death of a person. This involves organising their money, assets, and possessions and distributing them as an inheritance – after paying any taxes and debts. The property you’ve inherited isn’t technically yours until probate is complete, and this can be a lengthy process that can take up to a year to complete.
3. Check the Mortgage Status
You should check whether the property you’ve inherited has a mortgage and if so, get in touch with the lender to see how much is left to pay.
Most mortgages have a grace period when repayments are suspended while the estate is finalised. Once probate is finalised and the property is legally yours, you will then be responsible for the mortgage.
In some cases, the deceased may have a life insurance policy, which can be used to cover the cost of the outstanding mortgage.
If there’s no policy, or their life insurance policy isn’t enough to pay the mortgage off in full, you generally have two options:
- Sell the property and use funds from the sale to pay off any remaining mortgage
- Take out a new mortgage on the inherited property in your name
4. Transfer of Ownership
Once probate has been settled and the will has been administered, ownership of the property will be transferred to you and you can register your ownership at the Land Registry.
You don’t have to do this unless the property is sold or mortgaged, but it will give you the best proof of ownership and make things more straightforward when dealing with the property in the future.
What Happens If You Inherit a Share of a House?
If you have inherited a property with other people, such as a sibling, this means that you will each own equal shares of the property, unless stated otherwise in the will.
Often, selling the property is the simplest option – once it’s sold you can then split the proceeds between you.
What Happens If You Want to Keep the Property?
Once ownership of the property has been transferred, you’ll need to put the mortgage in your name if there is one. You can stick with the same lender or go with a new one but, either way, you’ll have to pass the usual credit checks.
If you own the property outright and there is no mortgage, you can move straight in and start enjoying your new home.
What Should You Do If You Want to Sell the Property?
You should be clearing the property of its contents – by selling items, donating to charity shops, or putting items into storage. You may also want to consider refreshing the décor and carpets to make them more appealing to potential buyers and achieve an optimal selling price.
Get in touch with local estate agents to get the property valued, and get advice on what renovations could boost its market value.
Once the property is up for sale, it’s the same as selling any other home, although you may have to pay inheritance tax or capital gains tax on the proceeds.
What Happens If You Inherit a Property in a Trust?
A trust is a way of holding and managing money or property for people who may not be ready or able to manage it for themselves, such as children. If you have been left the property in a trust, you are called the beneficiary.
The trustee is the legal owner of the property and they are legally bound to deal with the property as set out by the deceased in their will.
What Happens If the Inherited Property Is Abroad?
When the person who owned the property dies, all their foreign assets including overseas property, bank accounts, and investments, will be added to the value of their estate, which may be liable to UK inheritance tax.
There may also be additional taxes to pay in the country where the property is located.
The UK has signed double taxation treaties with many countries, which should allow you to claim back any double payments.
What Happens to the Inherited Property If There’s a Divorce?
Generally in a divorce, all assets are treated as joint assets. Money or property that has been inherited is not excluded from the assets to be divided.
However, every case is different and depends on individual circumstances including:
- The size of the inheritance
- When you received it
- How it was dealt with during the marriage
- The financial needs of both parties
Get in Touch with Our Experts
Home Property is a full-service conveyancing practice with teams covering every aspect of property law.
So, it doesn’t matter if you are looking for support with the transfer of equity, remortgaging, or any other conveyancing issue, no matter the issue we can help.
To speak to one of our expert solicitors in property, you can phone us at 0333 433 0275, email us at [email protected], or fill in our contact form.
