Understanding Stamp Duty on Inherited Property
Stamp Duty Land Tax (SDLT) is a tax payable on the purchase or transfer of property or land in England and Northern Ireland where the amount paid is above a certain threshold.
When you inherit a property, you’re not required to pay Stamp Duty. This tax applies only to transactions where property or land is exchanged for payment, such as buying a house. Inheritance, on the other hand, is considered a transfer of ownership through a will or by intestacy rules, not a transaction involving payment.
You should be aware though, that should you decide to purchase an additional property without selling your inherited one, and you aren’t replacing residential property as your main residence, then a 3% additional home stamp duty surcharge may apply. In this scenario, the inherited property would be considered an additional home.
Understanding the nuances of stamp duty and its applicability to your circumstances is an essential part of selling an inherited property and staying well-informed can help you navigate this process with ease and avoid any unexpected surprises down the line.
What Are The Costs Involved In Selling An Inherited House?
The costs involved in selling an inherited property will vary greatly depending on the method of sale;
Selling through an Estate Agent
Selling through an estate agent is a common route, but it does come with several costs:
Estate agent fees: These are typically a percentage of the sale price and are usually the most significant cost in this process. Rates vary, but they can be between 1% to 3% of the final sale price, plus VAT.
Conveyancing fees: These are legal fees you pay to a solicitor or conveyancer to handle the legal work. These solicitor fees can range from £500 to £1,500, including VAT.
Energy Performance Certificate (EPC): It’s a legal requirement to have an EPC when you sell a property. The cost for this is typically between £60 and £120.
Selling at Auction
Selling an inherited property at auction can be quicker than through an estate agent, but there are costs involved:
Auctioneer’s fees: These can be around 2.5% of the sale price, plus VAT. There might also be an entry fee, which can vary depending on the auction house.
Legal fees: You’ll need a solicitor to prepare the legal pack for potential buyers. This could cost between £500 and £1,000, depending on the complexity.
Selling to Cash House Buyers
Selling to cash house buyers can be the fastest route, and it often comes with fewer costs:
Service charge: Some cash house buyers may charge a service fee, though this is not always the case. It’s crucial to choose a reputable company that is transparent about any costs.
Legal fees: Some cash house buyers cover legal fees as part of their service, which can significantly reduce costs.
No estate agent or auctioneer fees: One of the significant benefits of selling to a cash buyer is that there are no estate agent or auctioneer fees to pay.
Whichever option you choose, you will also likely need to consider additional costs such as property clearance, repairs, or refurbishments, and potential tax liabilities, like Capital Gains Tax, if the property’s value has increased since you inherited it.
This table outlines the key differences in selling an inherited property through an estate agent, an auction house, or a cash house buyer.