Selling a Probate Property by Auction in 2025

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Key Considerations for Selling a Probate Property by Auction in 2025

Selling a probate property in 2025 involves navigating legal processes, tax implications, and market dynamics. Whether you opt for an estate agency sale, auction, or quick cash buyer, understanding recent legislative changes and the financial landscape ensures a smooth and successful transaction.

Updated by: Mark Grantham on  20th January 2025

1. Recent Legislation Changes in Probate and Property Sales

• Simplification of Probate Applications: Recent updates to probate law have streamlined the application process. Executors and administrators can now complete probate applications online for estates below a threshold value (as defined annually).
• Digital Verification of Wills: Digital systems introduced by the government in 2024 allow quicker verification of wills, reducing delays in obtaining the Grant of Probate.
• Inheritance Tax (IHT) Threshold Updates:
  • The nil-rate band remains at £325,000, and the residence nil-rate band (RNRB) remains at £175,000. However, estates valued over £2 million see a tapered reduction in RNRB.
  • Executors must now declare whether a property qualifies for RNRB directly during probate application, following amendments to HMRC forms in 2024.
• Mandatory Energy Performance Certificates (EPCs): If selling a probate property, you are required to have a valid EPC (unless exemptions apply).

2. Taxes to Consider

• Capital Gains Tax (CGT): If the property has increased in value between the date of inheritance and the date of sale, the estate may owe CGT. In 2025, CGT rates for residential properties remain:
  • 18% for basic rate taxpayers
  • 28% for higher/additional rate taxpayers
  Executors can claim the annual CGT allowance of £6,000 (reduced from £12,300 in 2023) for the estate.
• Inheritance Tax (IHT): Probate properties are included in the estate valuation for IHT purposes. If IHT applies, it must be paid before the Grant of Probate is issued. In some cases, HMRC allows payment in instalments if the property is unsold.
• Stamp Duty Land Tax (SDLT): While SDLT is paid by buyers, understanding current rates helps with pricing and negotiations. No changes to SDLT rates for residential properties have been announced for 2025.

3. Selling by Auction

• Benefits:
  • Speed: Auctions provide a fixed timeline, with contracts exchanged on the day of the auction and completion within 28 days.
  • Competitive Pricing: Bidding wars may drive the final sale price higher, particularly for properties in desirable locations.
  • As-Is Sales: Probate properties are often sold “as seen,” minimising costs for repair or presentation.
• Considerations:
  • Reserves and Auction Fees: Sellers must set a reserve price, which is the minimum amount they are willing to accept. Auction houses typically charge a seller’s fee (ranging from 2% to 3% of the sale price).
  • Marketing: Choose an auctioneer experienced in probate property sales to ensure wide exposure to the right buyers.
  • Certainty of Sale: While most properties sell on auction day, those that do not may incur additional fees for re-listing.

4. Practical Steps for Selling Probate Property

1. Obtain the Grant of Probate: Ensure probate is granted before proceeding with the sale. Without this, the legal authority to sell the property is absent.
2. Valuation: Obtain an accurate market valuation from estate agents or chartered surveyors. This ensures compliance with HMRC’s valuation for IHT.
3. Prepare the Property: While not always necessary, minor improvements or decluttering can make the property more appealing.
4. Choose a Selling Method:
   • Traditional Sale: Ideal for high-value, well-maintained properties.
   • Auction: Suited for quick sales or properties requiring significant work.
   • Cash Buyers: Companies or individuals offering fast cash purchases can be an option but may offer below market value.

Selling a probate property in 2025 requires careful planning and an understanding of legal, financial, and market considerations. By staying informed about legislative updates and exploring different selling options, you can make decisions that align with your goals. Whether you aim for a quick sale via auction or a traditional approach, a clear strategy will help you achieve the best possible outcome.

Next steps…

Contact us to find out if your property is suitable for auction Request a free pre-auction appraisal or feel free to call us on 0800 862 0206 – we’ll be happy to help.