Thursday, 04 September 2014
Valuing Property For Probate
When a deceased person's property is passed down to their beneficiaries, it will need to be valued. This is the case even if the beneficiaries are not planning to sell it, as it needs to be valued for probate purposes. While a property is going through probate, it is likely to be left empty for a certain length of time. If this is the case then it needs to be covered by unoccupied home insurance, and it is usually the responsibility of the executors to make sure this is done while probate is carried out.
Determining house value
For probate purposes, the house's value is defined by its open market value, or what the house might reasonably fetch if it was sold on the open market to a (willing) buyer on the date of transfer. This means that any peculiarities (such as a buyer desperate to purchase on the property's street and willing to pay well over the odds) should be ignored. Usually, the transfer date is the day the deceased died, but if the property was given as a gift in the seven years prior to this date then it is the date the gift was given.
Personal representatives and HMRC
Assuming the property’s situation is straightforward, then the Personal Representatives (including executors and administrators) are able to provide a valuation without the need to seek professional help. HM Revenue and Customs advise you to start by checking advertised property values for similar properties with local estate agents, and the Land Registry can offer details of recent sale prices locally. Remember to also make sure that unoccupied property insurance is in place while the valuation process is carried out.
Condition of the property
You will need to take the condition of the deceased's property into account, as this is likely to impact upon the building's value. You will also need to think about its beneficial features, such as garden size or access to other land that might be suitable for development. If you come to a range of values then you will usually be able to use an average, but whatever is calculated must be justifiable should you be asked by the District Valuer.
Bring in the professionals
In the current property market, it might be wise to instruct a chartered surveyor to value the property for probate on your behalf. Doing so will mean that the property is not over-valued, which might make it liable for inheritance tax that could be avoided otherwise. HMRC are also more likely to accept a valuation provided by a professional.
When a house is left empty for more than thirty days at a time, be it for probate or any other reason, it is likely to be difficult to secure home insurance for it. This is because many mainstream insurers are unwilling or unable to assess the risk associated with an empty house during probate, but we are different. With HomeProtect you can get a competitive online quote for unoccupied property insurance, regardless of how long a property might be empty for.
Using An Estate Agent To Sell Your Unoccupied PropertyFirst steps to selling
What is a probate valuation?
When someone dies, the Executor must value their estate to determine the worth of their assets at the time of their death. Assets can include finances, property, furniture, vehicles, pensions and personal belongings. You must have an accurate valuation to complete the HMRC Inheritance Tax form during probate to be able to administer the estate.