Selling an Inherited House in Ireland

An inherited sale is an ordinary property sale with a legal process bolted onto the front of it. The property part is the same as any other sale. The difference is that you cannot finish until the estate has been administered, and that two tax questions sit over the whole thing.

The most common and most expensive mistake is waiting for probate to complete before doing anything else. You do not have to. Marketing during probate is normal and can save you months.

Probate is the legal process of proving a will and giving the executor authority to deal with the deceased’s assets. Until the Grant of Probate issues, nobody has legal authority to transfer the property.

Where there is no will, the equivalent is a Grant of Letters of Administration, and the estate passes under the rules of intestacy rather than under a will. The practical effect on a sale is broadly the same, but it usually takes longer.

Realistic timeline through a solicitor is six to twelve months from death to Grant. It is longer where the estate is complex, where there are assets outside Ireland, where the will is contested, or where beneficiaries cannot be readily located.

You can market it straight away. There is no rule preventing an executor from instructing an agent, advertising the property and accepting an offer before the Grant issues. What you cannot do is close.

Running the two in parallel is usually the right call, because it means the marketing period and the probate period overlap instead of stacking. The one thing you must do is be straight with buyers and their solicitors from the start that the sale is subject to probate. A buyer who discovers that at week eight walks; a buyer who knew at the beginning plans around it.

Cash buyers and buyers with no chain suit probate sales best, precisely because they are not working to a deadline of their own.

This is the piece most people get wrong, and it is worth getting right because it has a direct cash consequence.

You need a formal written valuation of the property as at the date of death. That figure does two jobs:

• It is the value used to calculate Capital Acquisitions Tax on the inheritance.
• It becomes the base cost for Capital Gains Tax when the property is later sold.

Those two pull in opposite directions. A low valuation reduces any inheritance tax but increases the gain — and therefore the CGT — when you sell. A high valuation does the reverse. Which is why the answer is simply to get an accurate one from a qualified valuer, in writing, rather than an informal estate agent estimate. Revenue can and does query valuations that look convenient.

CAT is charged at 33% on the value of an inheritance above your lifetime threshold. The threshold depends on your relationship to the deceased.

Two reliefs are worth knowing about. Dwelling House Exemption can remove the charge entirely where the beneficiary has lived in the property as their only home for three years before the inheritance, does not own another property, and keeps it for six years afterwards — the conditions are strict and selling shortly after inheriting will usually break them. Agricultural and business reliefsmay apply to farms and trading businesses.

This is general information, not tax advice. CAT is the area where mistakes are most expensive and most avoidable — take advice from an accountant or your solicitor on your specific circumstances.

CAT deals with inheriting. CGT deals with selling. They are separate, and you can end up paying both.

CGT applies at 33% to the increase in value between the date-of-death valuation and the eventual sale price, less selling costs. There is an annual personal exemption of €1,270.

A worked example. The property was valued at €300,000 at the date of death and sells eighteen months later for €330,000. Selling costs — agent, solicitor, BER — come to €9,000. The gain is €330,000 less €300,000 less €9,000, so €21,000. After the €1,270 exemption, €19,730 is taxable at 33%, which is roughly €6,511.

Two useful consequences follow. Selling soon after death usually means little gain and little CGT. And your selling costs are deductible, so keep every invoice.

All the normal selling costs apply, plus the probate legal work on top.

The one people forget is the last line. An empty house still costs money every month it sits there, and vacant property insurance is materially more expensive than ordinary cover — most standard policies restrict cover once a property is unoccupied for 30 days. Tell your insurer.

Where a property passes to more than one beneficiary, every one of them must agree to the sale and sign the contract. One person cannot sell on behalf of the others.

Disagreements are common and usually take one of three shapes. Some want to sell and some want to keep it. There is no agreement on the asking price. Or one beneficiary is living in the property.

The usual resolution is that one beneficiary buys the others out at an independently assessed valuation. Where that is not possible, the remaining route is a court application for an order for sale — slow, expensive, and hard on the family. It is worth a great deal of patience to avoid it.

Agreeing an independent valuer and a minimum acceptable price in writing, early, before anyone is emotionally committed to a number, prevents most of these disputes.

Insurance. Standard home insurance typically restricts or voids cover once a property is unoccupied beyond about 30 days. You need to tell your insurer and usually move to specific unoccupied property cover.

Condition. Inherited houses are often older, sometimes have not been updated in decades, and may need clearing before they can be viewed. Budget for a skip and a few days.

Title. Older properties are more likely to be unregistered, to have title in a long-deceased relative’s name, or to have boundary discrepancies. Your solicitor should look at title early, because this is where months disappear.

Planning compliance. Extensions built decades ago may have no certificate of compliance. You will need one now, from an engineer or architect.

Emotion. This is a family home and often a recent bereavement. Build in more time than a normal sale would need, and be wary of any adviser pushing for speed.