Itis never easy dealing with the loss of a relative or close friend. Having some understanding of how property transfers from deceased estates are treated can alleviate the stress from managing the remaining assets and belongings of your lost loved one.
What is a ‘Deceased estate’?
A deceased estate is anything owned by the person who has died. This includes houses, bank accounts, shares, personal belonging, and liabilities (being debts owed at the time of death).
I have been gifted a house from the Will, what happens next?
Like a conveyance for the purchase of property, you will be asked to complete documents to enable the property to be registered in your name.
Do I need to pay a Land Transfer Duty (i.e. Stamp Duty) for an inherited house?
Simply put, no.
Ordinarily, a transfer of property triggers payment of land transfer duty. However, where the property is transferred in accordance with the terms of a Will, the transfer is exempted from land transfer duty, in accordance with Section 42 of the Duties Act.
In short, the requirements for this exemption to apply are:
- There is a Will; and
- The Will states who the house is to be gifted to; and
- The house is transferred to the named person as specified in the Will.
For example, John has been informed by the executors of Uncle Sam’s estate that he has gifted his $600,000 house to him. The executor transferred the property to John. John is exempted from paying land transfer duty.
The same cannot be said where the transfer is outside the terms of the Will. For more information on what the stamp duty treatments for property transfers, contact us.
Can I sell a house that I have inherited?
Yes – you can sell the house inherited either:
- Before the house is transferred to you from the executors of the deceased estate
For example, Uncle Sam gifts his house to John. Jane offers to buy John’s entitlement to the house. The executor transfers the property to Jane.
- After the property is transferred to you from the executors, and you sell the house.
For example, John is transferred the house from the executors. John is now the registered owner. John decides to sell the property and engages a real estate agent to assist.
We recommend that you investigate the treatment of proceeds received following the sale.
If you have any other queries related to inherited property, contact the W Legal Group team via phone or email and we would be happy to speak with you!