So, you have inherited a house, while this may sound exciting, the reality is less than a pleasure you may be wondering is there an inherited property tax? The truth, however, is that you have inherited expenses along with the house. Well-intentioned loved ones all too often leave their property in their will to beneficiaries that are already struggling to afford their monthly bills.
Often, these homes are in a severe state of distress and require a great deal of upfront cash flow for rehabilitation to turn into a desirable property. When a house is going to cost a lot to fix up it can be a burden. Plus to have to pay taxes and other hidden costs that you weren’t expecting – it becomes a lot more difficult to deal with after the loss of a loved one. We get that – we’re here to help.
Perhaps you already have your dream home and have no interest in residing in the property but feel a sentimental attachment. While it is understandable, the value of sentimentality won’t pay for the reality of carrying the cost of an inherited house. This harsh reality often leads to the ultimate decision to sell the property. Unless a house is producing income via rent, it is costing money in the form of mortgage payments, insurance, and taxes every month. Plus if it is an inherited house then there will be a few more costs associated with the transfer of ownership.
Whatever you decide to do, don’t delay in caring for the property. An excellent place to begin managing your inheritance is locating the contact and payment details on existing expenses.
Prior to the list of expenses that accrue monthly it is important to talk about the inherited property tax.
According to the IRS , the key first step to determining inherited property tax is to determine your basis in the property. To do this, determine the Fair Market Value on the day of the decedents death – this can be done by contacting the executor of the estate. If the property was sold for MORE than this amount than there is a taxable gain.
The longer that you hold onto a property following the loss of a loved one unfortunately the higher the chances are that your tax consequence when you do sell the property will be higher. By selling the property quickly, there is less time for the appreciation to accumulate and therefore you are able to reduce tax liabilities on the sale of the property.
We’ve gathered a list of typical monthly payments to help you with a starting point. Read on to learn about all of the costs of holding onto an inherited house in Sicklerville.
Property taxes will still be due on the property when you hold onto an inherited house in Sicklerville. These tax payments may or may not be a part of your monthly mortgage payment. Even if the mortgage is free and clear, annual property taxes will always be due. They will likely rise significantly because tax collectors will reassess the rate at the current market value.
Depending on the amount remaining on any mortgage, you may be responsible for mortgage insurance and property insurance while holding onto an inherited house in Sicklerville.
Assumption of Mortgage
Often, you can assume the mortgage if you hold onto an inherited house in Sicklerville. The wording of the original contract may be the determining factor in your ability to assume the mortgage. If they had a reverse mortgage, you would need to pay the loan off to keep the property.
While you are not necessarily obligated to pay the utility bills under the name of the deceased, if you’ll be residing in an inherited house in Sicklerville, you will want to keep the payments timely. Otherwise, they would become a lien on the property and taken out of the profits when sold.
Should you be considering maintaining ownership of the property, it would be advisable to have a professional inspection done to understand what you are getting into fully. Depending on the length of time that the house has been vacant and the state of repair the property is in, holding onto an inherited house in Sicklerville could become extremely expensive to maintain. Monthly expenses for repairs on older properties can easily equal or exceed mortgage payments.
It is often effortless to tell which homes are vacant because the yard has become tangled and unmanaged, adding to the distressed appearance. Unless you have spare time, you will need to ensure that the yard is appropriately maintained when holding onto an inherited house in Sicklerville.
Unless you have a plan for the property, holding onto an inherited house in Sicklerville is costing you money. Mike Buys Houses will pay you a great price and close when you are ready. If you don’t feel that you can handle the emotions of going through the possessions of your loved one to clean out the property, you can leave everything in place or take what you like, Mike Buys Houses will handle the rest for you. Call Mike Buys Houses at 267-984-4765 or send us a message today!