4 Things to Do if You Inherit a Property

Most people inherit a property after the death of a loved one. This can be a sad time and grief can often make it difficult to make sense of what to do with a property. In most cases, an inherited property shouldn’t be seen as a financial burden, but as something positive. Here is some advice that will help you make the best decision as to what to do next.

Don’t stress over the finances – you’ve got time

In some locations, an inheritance tax is charged on any properties that are inherited. However, you generally have a year to pay this off. As for mortgage payments, if these are not covered by a life insurance scheme, mortgage lenders will generally be sympathetic and not require you to pay these costs straight away. Until the will has been settled and you are officially the owner of the property, no-one owns the property and no payments need to be made.

What taxes do I have to pay?

You may have to pay inheritance tax, depending on the value of the property, as well as capital gains tax when you sell the property, as well as income tax if the property is being rented out to tenants. It could be worth seeking out financial advice from your bank or using a site like Expert Beacon to help understand these taxes.  

What do I do with the possessions?

Others may have inherited certain possessions, however it’s likely most of the contents of the property will be yours to deal with. You may wish to move certain possessions into your own home, whilst you may wish to sell others. Selling items is likely to be a long an emotionally testing process – you may be better off putting these items in storage temporarily. By searching for Bekins storage near me you may be able to find a solution that doesn’t require transporting these items too far. You can then deal with these items in your own time, choosing the best places to sell and donate them.

Sell, rent or move in?

You have three options as to what to do with the property – sell, rent or move in. Most people sell the property, which then allows them to cover the cost of inheritance tax and any outstanding mortgage. This could also allow you a profit to spend as you wish – you may decide to go travelling or buy a new home.

You could rent the property out and help to cover any existing mortgage. This may allow you to earn a little extra from the property. Being a landlord can be a lot of work although you may be able to pay a property management agency to help take off the load.

Your third option is to move in. If the property has been in the family for a long time, it may have sentimental value and may even have had all its mortgage paid off. You could sell your existing property to pay off inheritance tax. Alternatively, if you don’t currently own a property, it could be a way of getting on the property ladder for the first time.