Coming into ownership of a property through the loss of a family member can be difficult to deal with – with all the complications surrounding the inheritance of a home, it can be confusing to enter the world of probate and tax involved in such a sale.
There are a number of factors to consider if you have inherited, or look to inherit, a home. Are you the sole inheritor, and will own the entire property by yourself – or have you inherited joint ownership? You also need to consider your intentions for the home.
Whether you intend on renting, keeping or selling the property – your credit rating is an important factor to consider at every stage of inheriting a home.
Joint inheritance
If you have sole ownership of an inherited property, the process of deciding your next actions can be fairly simple. However, in cases where ownership has been split, choices will have to be made regarding overall decisions on what is to be done with the property.
There is the option of buying out other inheritors – however, this will likely involve putting up large amounts of upfront cash. This will more often than not mean applying for a loan, which is heavily reliant on a strong credit rating.
Intentions for the property
There are various services available depending on your intentions for a property – whether this be living in the home (rules may differ if you live abroad or own a second home), renting out the home (in which case tax may need to be paid on the rental profit, as pointed out on the UK Government’s website), or selling the property.
A high credit rating is important if you are intending to sell an inherited property. A credit rating score measures how likely you are deemed to pay back a debt you owe, and thus affects any future borrowing from a bank or building society. Any creditors that are owed money would likely have priority on any money made from the sale of such a house.
Issues of leftover debt need to be addressed. Any mortgage that remains unpaid from the previous owners of the property will also need to be taken into consideration. Unfortunately a poor credit rating means that you may not be able to take on a mortgage from a previous property and could risk losing the home.
Other concerns
If you do choose to sell and have the necessary requirements, you will also need to consider whether you are required to pay any Capital Gains tax on any profit you may make. If this has not already been addressed in the deceased person’s will or estate documents, you will need to consider how to get a probate property valuation yourself.
Beyond this, it may be sensible to seek further expert advice through a company such as Probate Purchasers, a company which guarantees an efficient sale of probate properties. The firm is a founding member of the National Association of Property Buyers, as Probate Purchasers explains on its website.
