Selling An Inherited Property In New Zealand
A Complete Guide To Sell Your Inherited House
If you’ve inherited property and are interested in selling it, you may have some questions. Today we will explain all about:
- Selling inherited property.
- Capital gains and other taxes.
- Siblings and family.
On top of this, we will dive into some specific questions such as:
- Do all heirs have to agree to sell the property?
- How to avoid paying capital gains tax on inherited property.
- What happens when one sibling is living in an inherited property and refuses to sell?
Where To Start When Selling Inherited Property
Selling a house can be stressful and complicated and this can be magnified if it is inherited because with an inheritance comes an extra set of rules and regulations which begs the questions:
- Can I Sell Inherited Property?
- Where Do I Start When Selling An Inherited House?
Let’s answer these questions before we go any further.
Can you sell a property that is inherited?
Where Do I Start To Sell My Inheritance?
As previously mentioned the house must go through probate. During this time it is important you keep up the maintenance of the property. Because of this the first things you should do include:
- Make sure the house is insured in case of a fire, hail, or weather bomb.
- Check utilities are on, particularly if it’s winter so the pipes don’t freeze and burst.
- Go by the house and check it is locked up so no one can easily get inside and trash the house.
- Do property taxes need to be paid or the mortgage?
These are all great places to start when you are planning to sell your inheritance. While they don’t go directly towards securing a quick sale they will ensure the property stays in good condition so you can get a great price.
When Can I Sell My Inherited Property?
If you inherit a house from someone, you can’t just sell it right away. First, you have to make sure who really owns it, and then it has to be officially given to you. As previously mentioned this process is called probate. Once probate has been completed and the house is in your name you can go ahead and sell it.
How To Sell Inherited Property
Before we touch on some specifics like selling a house you inherited with a sibling or the taxes associated with inherited property I thought we should talk about the basics of how to sell an inherited property.
Is that ok with you?
How to sell an inherited house in New Zealand is very similar to selling any property. The 3 most common ways you can sell your house are:
- Hire a real estate agent to sell your inheritance.
- Sell your inherited home by yourself.
- Find a home-buying company to buy your house.
Let’s look at each option in more detail, shall we?
Sell With A Realtor
Ideally, you will find a highly experienced agent that understands local conditions. They’ll advise you on what you need to fix and renovate, list your property on a site that gets maximum exposure, and market it through social media and showings.
While this is a great idea for the complete novice you must be aware that agents will charge a hefty commission. This can range from 3% up to 6% of the sales price.
The cost of selling an inherited property with a realtor can quickly ballon to more than 10% or even 20% of the sales price especially if they suggest you renovate kitchens and bathrooms.
Sell By Yourself (FSBO)
FSBO stands for “For Sale By Owner” and in this situation, the seller is responsible for everything. You can save on hefty commissions by selling your inheritance on your own. But you will need to handle the paperwork by yourself.
You should only sell a property on your own if you have some idea of housing market conditions and a clear idea of what you need to get out of the sale.
Sell Your Inherited Property To An Experienced Home Buying Company.
The third option to sell is to sell to a professional home buyer. This is the fastest and easiest way to sell any house. At Sell My House Fast we can buy a house in less than 7 days. Plus you don’t have to make any repairs or even clean!
Many people who inherit property choose to sell to a cash home buyer because the property is in a state of disrepair and they just want to get rid of it.
If you would like a no-obligation cash offer to sell your inherited house please fill out this simple form.
Sell Inherited Property With Multiple Owners
If there is only one person named on the will that simplifies the process because the “sole heir” can make 100% of the decisions such as:
- How to sell it
- For Sale By Owner versus,
- Selling With A Realtor versus,
- An as-is cash sale.
- Maybe they would choose to keep it as a rental.
- Perhaps live in the property.
But what happens if there are multiple owners?
If the person who passed away left the house to more than one person in their will, all those people have to agree on what to do with it.
If everyone says, ‘Let’s sell it and split the money,’ then you have to work out the best option for you to sell.
If choosing to sell with a realtor then you have to clean up the place to help sell it. Alternatively, if you and your relatives don’t want to fix anything or spend any money to sell your house you could sell your house for cash to a home-buying company like Sell My House Fast.
Of course, siblings, family, and relatives don’t always agree which can raise more complications and questions such as:
Do All Heirs Have To Agree To Sell Inherited House In New Zealand
Selling Share Of Inherited Property To Siblings
Selling your share of an inheritance can be broken down in to 5 easy to follow steps.
First, talk to your sibling and find out if they’re interested in buying the inherited house from you. It’s important to have an open and honest conversation about it.
Get the house appraised to figure out how much it’s worth. This helps both you and your sibling agree on a fair price for the house.
You might want to hire a real estate lawyer or a professional who can help with the paperwork and legal stuff. They can make sure everything is done correctly.
Work together to create a sales agreement that includes all the important details like the price, when the sale will happen, and any conditions you both agree on.
Once you both agree on the terms and sign the agreement, you can go ahead and transfer ownership of the house to your sibling. Make sure to follow any local laws and rules about property transfers.
What Happens If Sibling Refuses To Sell Share Of Inherited Property?
If a sibling is refusing to sell their share of a house in New Zealand you can force the sale under the Property Law Act. The process is called partition and sale.
The partition and sale of real estate involves making an application to the High Court. Once all the necessary paperwork is completed and the order given you can force the sale of the property.
Also, this will cost a considerable amount of money so in an ideal situation you could negotiate with your brother, sister, or family member who is refusing to sell and come up with a compromise.
Sell Inherited House: A Guide To Selling Succesfully
Selling any home can be a stressful event, let alone a house you grew up in because of the memories and associated emotions they can dredge up. If you sell your inherited property you can then use the inheritance to create new loving memories in honor of your loved one that passed away.
FINAL WORD: If you have recently inherited a home the team at Sell My House Fast would like to offer our condolences. We wish you and your family well as you travel through a heartfelt time.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Does New Zealand Have Capital Gains Tax On Real Estate?
New Zealand does have a capital gains tax on real estate. Therefore if you buy a house and resell it for a profit you will pay tax on the profit. The rules are defined by the IRD under the tax code called the “Bright Line Rule“. However, like most taxes, there are exceptions to the rule.
When selling an inheritance you might be pleasantly surprised about whether it is taxable or not.
Keep reading!
Do I Have To Pay Capital Gains Tax On My Inherited House In New Zealand?
As mentioned, there are a few exceptions to what types of real estate sales are taxable in New Zealand, and selling inherited property is one of those.
The IRD clearly states exceptions for inherited property and relationship property in Chapter 6 of their guides as follows:
Property transferred on the death of a person
6.2 When a person dies, their property may be sold or transferred to a beneficiary, who may subsequently sell the property. It is intended those disposals will not trigger a liability for tax under the bright-line test.”
Simply put, if you inherit a house and then sell the house you will not have to pay taxes on the money.
BRILLIANT, RIGHT?
There are more parts to the Bright Line Rule so if you are buying or selling your inherited property it would pay to work with a company that understands exactly what is required when selling inherited property in New Zealand soyou don’t end up with an unexpected tax bill.
Frequently Asked Questions
Is an inheritance taxable in NZ?
If you inherit a house in New Zealand and then sell it the money you get is not taxable because inherited properties fall under the exceptions to the Bright Line Rule. What this means is there is no inheritance tax for real estate in New Zealand.
How long have you got to sell an inherited property?
After probate is completed and you are the legal owner you can sell an inherited property whenever you want. This could be immediately or it could be 10 years in the future.
However a word of warning regarding how long it may take to become the legal owner.
By law, the Executor has to hold onto estate assets for six months from the date Probate is granted, and cannot pay out any money to the beneficiaries before this time is up.
The reason for this is in case any claims are made against the Estate, eg: by long lost children, or in case any creditors emerge who are owed money.
Can I sell an inherited property in New Zealand?
You can sell an inherited property in New Zealand. If you inherit the property by yourself you can sell it and not pay any taxes. You will not pay any taxes because the Bright Line Rule states that inherited property is an exception to the rule.
If you inherited the property with a sibling or family member you can still avoid capital gains tax when you sell. However, there are a few instances where you may have to pay tax and because of this, I would urge you to do further research on this topic.
Do I have to declare inheritance money as income in New Zealand?
You do not have to declare the inheritance money as income in New Zealand. You can take that money tax-free. However, if you in turn invest that money and make a profit you will have to declare the subsequent profit as income.
We Buy Inherited Property AS-IS For Cash
If you have inherited a property, house, land, or any type of real estate and want to get rid of it without spending any money we will buy it from you!
As professional home buyers, we have bought many inherited houses and been involved with many estates.
To get your no-obligation free offer to sell your inheritance simply fill out the form below.
About the Author: Shaun Martin
Shaun Martin has experienced the highs and lows of the real estate markets since the 1990s across multiple national and international markets. As the owner of Sell My House Fast, Shaun’s mission is to provide home sellers in New Zealand with more transparency and options for the various real estate problems they find themselves in.
By providing selling solutions that go outside the box of a traditional property sale, Shaun has given people who need to sell more flexibility, control, and power when seeking an answer.
Shaun has been featured in a number of national and international real estate publications including Yahoo Finance, Apartment Therapy, Realtor.com, Business Insider, Market Watch, Rent Cafe, and Family Handyman to name a few.