Selling An Inherited Property

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Inheriting a property can leave you with difficult decisions to make. Do you sell, rent it out or live in it? Selling an inherited property can certainly be tempting, however inheriting a house and selling it through an estate agent isn’t always guaranteed to be a speedy process, and, even if you’re lucky enough to find a quick buyer, there may be other costs to consider.

Use our guide below to tell you what you need when selling an inherited property.

In this article:

Costs of dealing with an inherited property

When you first inherit a property, potential costs fall into three categories: taxes, mortgages and home insurance.


There are three types of tax you could be liable to pay on an inherited property: inheritance tax, income tax and capital gains tax. Take a look at our useful guide below that goes into more depth on tax on inherited property, and if you’re still not sure of something a quick call to your solicitor should determine what you’re liable for. Don’t put it off though – some taxes are payable within the first six months when inheriting a house.


Many inherited homes will already have the mortgage paid off, but it’s always worth checking if there’s an outstanding balance. Contact the mortgage lender to find out more details, as well as their ‘payment after death’ terms.

Home insurance

The type of insurance you will have to pay depends on what you’re planning to do with the property. If it remains empty for more than 30 days, you’ll need unoccupied insurance. If you rent it out, you’ll have to invest in a landlord policy. If you move in yourself, you’ll need a standard home insurance policy.

Top tip: Don’t forget that you’re liable for council tax on an inherited property, even when it’s unoccupied. However, your local council may offer a discount, so it’s worth contacting them to find out more.

Types of tax on inherited property

Inheritance tax

If you inherit a property, you will have to pay inheritance tax if the total value of the estate (the deceased’s total assets) exceeds £325,000. This threshold may rise, allowing you to pay less tax, if you have been left the property by a spouse or parent.

Inheritance tax must be paid within six months of the person’s death or HMRC will charge interest. Tax on inherited property can be paid in instalments over ten years but will also incur interest. For more information on paying inheritance tax on property, take a look at the government’s Money Advice Service.

Income tax

You will only have to pay income tax on an inherited property if you decide to let it out and receive a rental income. Don’t forget to declare this income on a Self-Assessment tax return each year. There are certain expenses that you might be able to claim against your rental income, reducing your tax bill. Take a look at the government’s guide to renting out a property for more information.

Capital gains tax

If you decide on selling an inherited house at a later date and the value has risen, you will be liable for capital gains tax. For instance, if the property is worth £250,000 when you inherit it but is valued at £300,000 two years later, you will need to pay capital gains on £50,000. This can be offset against the fees incurred when you sell the home, as well as certain improvements you’ve made.

Calculating the tax payable upon selling inherited property is complicated and depends on a number of factors – including your income and a tax-free allowance known as the Annual Exempt Amount.

The good news is that HMRC also provide a handy CGT calculator to help you calculate capital gains on inherited property for your personal situation. To successfully use the calculator, you will need to know some, if not all, of the following:

  • The date in which you sold or gave away your property
  • Whether you sold the property for less than it was worth / who you gave the property to
  • How much you sold the property for
  • What the property was worth when you sold it
  • How much you paid in costs when you stopped owning the property
  • How much the property was worth on 31st March 1982/how much the property was worth when you inherited
  • How much you’ve spent on improvements

How to avoid capital gains tax when selling inherited property

There are only two ways to avoid paying capital gains on an inherited property. The first way is if the house is your primary residence and you don’t own any other homes, you can claim Private Residence Relief. Otherwise, your only other option to avoid capital gains tax is to sell the house immediately, which is something that Good Move can certainly help with.

Step-by-step guide to selling an inherited house

If you’ve deciding you’re selling an inherited home, these are the steps you’ll need to follow.

  1. Find the will

The will is the legal document that names the executor (the person in charge of administering the deceased’s estate) and the beneficiaries (those who stand to inherit their estate). Ideally, the deceased will have left instructions on where to find their will. If not, have a look in the usual places – filing cabinets, drawers and safes. If you still can’t find it, the next step is to contact their solicitor. If they are no longer in business, get in touch with the Solicitors Regulation Authority who may be able to help. If you can’t find a will, the deceased may not have made one. In this case their estate would usually be administered by the next of kin.

  1. Apply for probate

If you are the executor of the will, you will need to apply for probate. The only exception to this is if there is a surviving spouse or civil partner who is named on the mortgage deed. Probate gives legal authority to act on behalf of the deceased, including access to bank accounts, investments and so on.

As part of the probate process you will need to get the property valued as part of their estate, even if you’re not planning to sell straight away. Determining the value of an estate can take months – so be aware of HMRC’s six-month deadline for paying inheritance tax.

  1. Pay inheritance tax

First, establish whether you need to pay inheritance tax.

  • An estate is only liable for inheritance tax if it is worth more than £325,000.
  • If an estate is left to a spouse or a civil partner inheritance tax does not apply.
  • Direct descendants (children, grandchildren, great-grandchildren, step and foster children etc) can inherit a property up to the value of £450,000 without having to pay inheritance tax. This is the case however many beneficiaries are named – which useful to remember if you’ve inherited a house with siblings.
  • Other relatives such as siblings, nieces and nephews and anyone else named in a will must pay tax above the standard £325,000 threshold.

If you think you’re liable for inheritance tax, you can use this useful calculator to work out how much you need to pay.

  1. Pay capital gains tax

As noted above, you will only have to pay capital gains tax on inherited property if the value of the home has risen since it was first valued for probate purposes. This can be offset against the fees incurred to sell it and any major improvements you’ve made. Plus, everyone receives a tax-free allowance. Check HMRC’s CGT calculator to see what you’re liable for.

  1. Sell your property

Once property ownership formally passes to you, you can go about selling an inherited house. First, register your ownership at the Land Registry. Then you’ll need to choose between a traditional estate agent sale, auction sale or using a quick house sale company like Goodmove.

Selling with estate agents vs. quick house sale companies?

Both methods have their pros and cons, so it’s important to understand the similarities and differences in order to decide which is the best method to suit the circumstances.

Estate agents

Using an estate agent is one of the most common methods of selling an inherited property. This method does of course offer positives as well as negatives.


  • Using an estate agent can help achieve a slightly higher price on the property market.
  • Estate agents will have good local knowledge of your area, which can work to your property’s advantage when selling.


  • A sale with an estate agent is not always guaranteed and can take up to 12 months, if not longer, to happen.
  • There are high fees associated with selling property through an estate agent which can be around 2% of the sale price.
  • If the property doesn’t sell, estate agents can tie homeowners into contracts of up to six months, which can prevent the sale of the property to a competitor without incurring fees.

Property buying companies

Selling an inherited house through a property buying company is often an easier and quicker process than going through an estate agent, which can result in less hassle for the homeowner.


  • A sale can be completed in a matter of days, not months.
  • All seller fees involved in selling an inherited property are paid for on behalf of the beneficiaries. Therefore, legal fees, surveys and valuations are paid for.
  • There are lengthy contracts that can occur by selling through an estate agent.


  • Beneficiaries won’t receive the full market value of the inherited house sale (up to 85% of the market value), but a sale will be completed in as little as seven days, taking the stress away from the sale.

What’s the next step?

If you’ve decided to go down the route of using a ‘we buy any house’ company, Good Move can help make the sale as quick and easy as possible.

We’ve established ourselves as one of the most regulated property buying company in the UK, and are members of the NAPB (National Association of Property Buyers).

If you would like a valuation for your property or for one of our RICS-approved surveyors to discuss a cash offer, then get in touch with us today.

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We are proud to be the most regulated property buyer operating in the ‘Quick House Sale’ industry. We are an active member of the NAPB (National Association Of Property Buyers) and are RICS regulated, which means you can have every confidence of selling your home with us quickly & easily.