Whether you’ve inherited an extensive detached house in Alwoodley or a compact terrace in Armley, you’re in the right place. Selling inherited property in Leeds poses several hurdles, plus emotional turmoil, especially if you’ve no clue where to start. With that in mind, if you want to learn more about the process and what to expect, read on. In this post, we’ll outline the key things you need to do before you can sell an inherited house. We’ll also touch on average timelines and the tax you may be liable for, so there are no unpleasant surprises.
What do I need to sell an inherited property in Leeds?
The first thing you’ll need before selling inherited property in Leeds is your loved one’s will. This should outline one or more executors and any beneficiaries who will inherit all or part of their estate. The executor is responsible for dealing with the estate, plus any debts and taxes, and making sure the wishes outlined are met. If there is no will, the deceased person’s spouse or closest living relative will inherit their funds or property by default.
Simply being named in a will does not give you the right to sell your late relative’s property. Instead, you’ll need to apply for probate and have it granted before selling. If there is a will, named executors can apply. If not, the closest living relative can apply. You can do this online or via a solicitor if you don’t have all the information needed to hand.
Once you’ve been granted probate, you’ll have the legal authority to manage the estate and share out funds as described in the will. Your other tasks will include valuing and selling the house, and ensuring relevant taxes are paid within 6 months. The only time probate isn’t needed is if the property was joint-owned, as it will automatically pass to the surviving owner. Or if there is no property and only limited savings – usually less than £5,000 – to distribute.
Other things you’ll need to do
· Check whether there is an outstanding mortgage to pay. The lender may be able to pause repayments until the estate has been dealt with. There could also be a life insurance policy in place to cover the cost of the debt, so be sure to check this too.
· Arrange unoccupied home insurance to protect the property until it can be sold. The existing policy may just need updating, or you may need to take out a new one. Either way, it’s vital as empty homes are more likely to be broken into or vandalised.
· Clear the house’s contents, switch off the utilities and carry out any refurbishment work to make it appealing to buyers. Don’t have the resources to do so and think the property may be hard to sell? Consider a guaranteed cash house buyer instead.
How soon after inheriting a property can I sell it?
Selling an inherited property in Leeds is possible once probate has been granted. Gaining approval typically takes around 3-6 months if you’re a named executor in the will and the estate is straightforward. However, if there’s a family dispute or more than one person applies, this can prolong the process. The same goes if the estate is quite complicated. In this case, to minimise the risk of problems arising, its often best to go through a solicitor.
While you wait, you’ll also need to get the property valued by an appraiser. This figure will be used to calculate inheritance tax, and at a later date, any Capital Gains tax due too.
How much tax do I pay if I sell an inherited property?
There are two main types of tax you’ll be required to pay when inheriting a house, which we’ve covered in more detail below. Additionally, if you inherit a rental property and make a profit from it, you’ll have to pay income tax upon selling too.
This type of tax must be paid on inherited estates (including houses) worth over £325,000. The only exemption is if you are the deceased person’s spouse or civil partner. However, the threshold does increase up to £500,000 for children or grandchildren who inherit. Either way, the executor will be responsible for paying 40% inheritance tax, no later than 6 months after the person’s death. This can be paid from the deceased’s accounts or by selling their home.
Capital Gains tax
Capital Gains tax is paid on the profit you make from selling inherited property where it’s not your primary residence. As such, if you already own a home, you’ll need to declare the second property to HMRC within two years of inheriting. If you sell the property immediately, at the same price it was valued at during the probate process, you won’t have anything to pay. But if the property sells for more at a later date, you will be taxed on the profit.
The amount of Capital Gains tax you’ll pay depends on several factors. These include the size of the increase between the initial valuation and the final sale price. In addition, whether you’re a basic or higher rate tax payer will be taken into account. You’re also entitled to an tax-free CGT allowance which changes annually. Typically, however, Capital Gains tax falls between 18-28%. Learn all about Capital Gains tax and allowances on the Gov.UK website.
Sell an inherited property fast in Leeds
Inherited a house in Leeds that you don’t want to move into? It may be too small for you, in an area you’re unfamiliar with or need a major renovation. Or perhaps you already own a home, so have no need for it. Whatever the scenario, you’ll want to sell as soon as possible.
The only problem is that properties in Leeds currently take 91 days to sell on average. Meanwhile, one bedroom flats and larger detached homes can take even longer – around four months in general. On top of that, you can’t sell inherited property until you’ve been granted probate. With that in mind, you can expect a 6 month turnaround at best and often, closer to a year. There’s also the possibility of sales falling through to contend with. If you’re keen to speed up the process, We Buy Any Home can help you sell your house fast. From Hunslet to Horsforth and everywhere in between, we guarantee a quick sale on all Leeds homes, regardless of condition. That way, you could sell your inherited property in less than a fortnight. Enter your postcode below to receive an instant cash offer and learn more about our fast and efficient process.