Inherited a Property? Here’s What You Need to Know Before You Sell
Inheriting a property can feel overwhelming. At a time when you may already be dealing with grief and the practicalities of settling an estate, the prospect of selling a home you’ve inherited — often from someone you loved — adds a whole layer of complexity. This guide walks you through the process and costs involved, so you can approach it with clarity and confidence.
First Things First: Probate
Before you can sell an inherited property, you’ll almost certainly need to obtain a Grant of Probate (or, if there is no will, Letters of Administration). This is the legal document that gives the executor of the estate the authority to deal with the deceased’s assets — including property.
You cannot exchange contracts on a sale until probate is granted, although you can market the property beforehand, which many families choose to do to save time.
How long does probate take? In straightforward cases, typically four to eight weeks. Where estates are more complex — multiple assets, disputed wills, or inheritance tax liabilities — it can take considerably longer. Some cases run to six months or more. It’s worth applying as early as possible.
Understanding Inheritance Tax
Inheritance Tax (IHT) is one of the most significant costs associated with an inherited property, and one that catches many people off guard.
The current IHT threshold — known as the nil-rate band — is £325,000. Estates above this value are taxed at 40% on the amount above the threshold. However, there are important allowances that can reduce or eliminate the bill:
- The residence nil-rate band adds a further £175,000 allowance where a property is left to direct descendants (children or grandchildren), bringing the combined threshold to £500,000 for an individual — or up to £1 million for a married couple or civil partnership.
- Gifts made more than seven years before death are generally exempt from IHT.
- Charitable donations can reduce the IHT rate to 36% if at least 10% of the net estate is left to charity.
IHT must typically be paid within six months of the date of death — and crucially, it often needs to be paid before probate is granted, which means before the property can be sold. If there isn’t enough cash in the estate to cover it, there are options: HMRC allows IHT on property to be paid in instalments over ten years, or executors can sometimes arrange a bridging loan.
This is complex territory and worth taking professional advice on early.
Capital Gains Tax: The One People Often Forget
Inheritance Tax tends to get most of the attention, but Capital Gains Tax (CGT) can also apply — and it’s easily overlooked.
When you inherit a property, you inherit it at its probate value (the market value at the date of death). If you sell it for more than that value, CGT is potentially due on the difference.
The current CGT rates for residential property are 18% for basic rate taxpayers and 24% for higher rate taxpayers. However, if you sell relatively quickly after inheriting — before the property has had time to increase significantly in value — your CGT liability may be minimal or nil.
If the property was the deceased’s main residence and has been left to a direct descendant, Private Residence Relief may reduce or eliminate any CGT due, but the rules are nuanced and worth checking with a tax adviser.
The Selling Process Step by Step
Once probate is granted, the selling process broadly follows the same route as any other property sale — but with a few additional considerations.
1. Get the property valued Obtain a current market valuation. This may differ from the probate valuation, particularly if time has passed. In the current South Wales market, accurate local pricing is essential — buyers are well-informed and negotiating hard.
2. Decide whether to sell as-is or prepare the property Inherited properties are often sold as seen, particularly if they require modernisation or updating. This can actually work in your favour — auction or open market buyers who are looking for a project are often willing to pay a fair price without the expectation of a freshly renovated home. That said, simple decluttering and cleaning can make a meaningful difference to presentation.
3. Appoint an estate agent Choose an agent who knows your local market and has experience with probate sales. These transactions often require a little more patience and communication given the legal process running alongside, so a good working relationship matters.
4. Instruct a solicitor You’ll need a solicitor or conveyancer experienced in probate sales. They’ll handle the legal title, the Grant of Probate documentation, and the transfer of ownership. Budget for conveyancing fees of roughly £1,500 to £3,000 depending on the complexity of the transaction.
5. Market the property and accept an offer As with any sale, the right price and presentation are key. Once an offer is accepted, your solicitor will handle the exchange and completion process.
6. Settle any outstanding costs from the proceeds Once sold, the proceeds form part of the estate to be distributed in line with the will, after all costs and taxes have been settled.
A Summary of Typical Costs
It’s worth having a realistic picture of what selling an inherited property can cost. Every estate is different, but here’s a broad guide:
Probate application fee: £300 for estates over £5,000 (plus £1.50 per additional copy of the grant)
Solicitor’s fees for probate: £2,000 to £5,000+ depending on complexity, or a percentage of the estate value (typically 1–3%)
Conveyancing fees: £1,500 to £3,000
Estate agent fees: Typically 1–3% of the sale price plus VAT
Energy Performance Certificate (EPC): £60–£120 if one isn’t in place or has expired
Clearance costs: Variable, but professional house clearance in South Wales typically runs from £300 to £1,000+ depending on the volume of contents
Maintenance and utilities while the property is on the market: Don’t overlook ongoing costs — buildings insurance, council tax (estates in probate may be exempt for a period, but this ends), and any utilities that need to remain connected.
Inheritance Tax: 40% on the value of the estate above the threshold, where applicable
Capital Gains Tax: 18% or 24% on any increase in value between probate valuation and sale price, where applicable
A Note on Timelines
The honest answer is that selling an inherited property takes longer than a standard sale. Between the probate process, potential IHT arrangements, and the emotional weight of clearing and preparing a family home, it’s not unusual for the whole process to take six to twelve months from death to completion. Planning for this — financially and practically — makes the journey considerably smoother.
You Don’t Have to Navigate This Alone
Selling an inherited property is one of the more complex transactions most people will ever be involved in, and it often coincides with one of the more difficult periods of their lives. Having the right people around you — a knowledgeable local estate agent, an experienced solicitor, and a clear tax adviser — makes an enormous difference.
If you’ve recently inherited a property in South Wales and aren’t sure where to start, we’re happy to have an informal conversation. There’s no obligation — just straightforward, local advice from people who understand the market and the process.