Do you have to sell. an inherited house? Good question, when inheriting a house and administering a deceased estate, it is easy to become overwhelmed with all the steps you need to take and the hoops you need to jump through. Managing real estate owned by a deceased proprietor can add some tough decisions to the list of things to deal with.
At Tasbourne Properties we understand that sometimes you just need a moment to get your bearings before you sell that beloved family home. Or that you could your professional help of the real estate kind.
Timeframes to keep in mind
If you are appointed as an Executor, you should attempt to probate the Will within 6 months of date of death.
Whether you need a grant of probate or not, the general principle is that a legal personal representative (i.e. an executor) should attempt to distribute the assets on the terms of the Will before the first anniversary of the Deceased’s passing. This is called the “Executor’s year”.
When to transfer the house
The house should be transferred within 2 years of the date of death, if possible.
The reason is that if the house is transferred or sold within 2 years of the date of death, the ATO has established principles to delay any Capital Gains Tax (“CGT”) being payable during the estate administration if either of the following conditions are met:
• the house was acquired before 20 September 1985 (when CGT came into effect); or
• the house was the main residence of the Deceased and was not being used to produce income.
If a house is a specific gift in the will, you should transfer it to the beneficiary as soon as possible during the estate administration process but within 2 years of the date of death.
If the house is to be sold by the executors, then title is first transmitted to the executors. The executors can then sign everything necessary to sell the house to any buyer. The house should be sold within 2 years
If you don’t sell within 2 years
If the house is sold after 2 years, the estate may have to pay CGT on the sale of the house. That means less inheritance in the hands of the beneficiaries.
If the sale is delayed for reasons outside of the executor’s control, the ATO gives you options to apply to have the CGT exemption anyway.
How can we help?
When dealing with real estate administration, it’s important to have the right team behind you. Tasbourne Properties will connect you with a lawyer and accountant to manage the numbers and legalities; we will help you manage the real estate. Should you have any questions ring us up at 0475 090 070.