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How Much Does A Property Valuation For Probate Cost?

Property Saviour » Inherited Property » How Much Does A Property Valuation For Probate Cost?

The cost of probate property valuations in London typically ranges from one to five per cent of the estate’s total value. It is important to agree on the cost upfront and this will depend on who you decide to hire – a Solicitor, Surveyor, or Real Estate Agent.

To assist you with making an informed decision, here is a cost guide for each option and the factors that influence them.

Table of Contents

What is a property probate valuation?

When someone passes away, the legal process of organizing their possessions is known as probate. This is usually handled by the executors of the will, who carry out the wishes of the deceased.

The Grant of Representation or Grant of Probate grants the executor access to all documents to work out the value of the deceased’s assets, including:

  • Bank accounts,
  • Stocks and shares,
  • Property and homes,
  • Items within the property.

If someone dies without making a will or leaving instructions on how to deal with their estate, the Rules of Intestacy must be followed.

How is a property valued for probate?

Similarly, item valuations are conducted from the day of death, otherwise known as the date of death valuation. In this case, values are determined by selling prices on the open market.

For example, if a person died on June 25th but the house valuation happened on July 4th, the selling prices must reflect the valuations from June 25th.

Can you sell an inherited property after probate?
If someone dies without making a will or leaving instructions on how to deal with their estate, the Rules of Intestacy must be followed.

What is a date of death valuation?

Determining the value of a property for probate purposes can be complicated. If the owner passes away during a period of high property prices, but then the market drops afterwards, the date of death valuation may be higher than what could be achieved at the end.

The HMRC may decide that the property has been undervalued, resulting in a greater amount of tax to pay than the correct value of the house.

How does Capital Gains Tax work with date of death valuations?

When inheriting the value of an estate, Capital Gains Tax is calculated based on any increase in the property’s value from the date of death to when it is sold. Beneficiaries must pay CGT on this increase.

It is important to note that the amount of CGT owed is calculated based on how much the property’s value has increased from the date of death to when it is sold. Therefore, any increase in the property’s value between these two times will determine the amount of CGT owed.

How do you get a property valuation for probate?

Because inheritance tax is a legal requirement on probate property, it is essential to get a professional valuation from the HMRC. This ensures you are paying the right amount of tax on the property.

Getting a property probate valuation is straightforward. Simply contact a local estate agent, chartered surveyor, or probate solicitor to carry out the valuation.

If you are already selling your property via an estate agent, the conversation about the valuation should have already taken place.

Alternatively, you can avoid the hassle of using an estate agent and sell to us. We are cash buyers and can purchase properties in as little as seven days.

How Much Does A Property Valuation For Probate Cost
Such a valuation can be a difficult process, but it is necessary to make an informed decision and ensure that the HMRC is correctly calculating the inheritance tax on the property.

What’s the difference between probate and market valuation?

A market valuation is estimated using current market trends, similar sold properties, and the property’s condition and location. A probate property valuation is calculated so the HMRC can calculate inheritance tax on the property.

It requires an analysis of market trends, comparisons with similar properties, and consideration of the property’s condition and location.

Such a valuation can be a difficult process, but it is necessary to make an informed decision and ensure that the HMRC is correctly calculating the inheritance tax on the property.

How much does a probate valuation cost?

The cost of a probate valuation depends largely on the type of professional you use to carry it out – whether it’s an estate agent, solicitor or surveyor.

  1. Estate agents, most won’t charge a fee as it’s part of their service. However, some may charge a small fee (usually less than 1% of the property value) for properties that are below the £325,000 inheritance tax threshold or small-medium sized residential properties.
  2. Solicitors who specialize in probate in the UK usually charge between 2% and 5% of the estate’s total value, plus VAT. The rule of thumb is the more experienced the solicitor, the higher their charge rate.

The following table outlines how much you may have to pay:

Surveyor’s valuation

Surveyors are the most recommended type of probate valuation, particularly those who are registered with the Royal Institution of Chartered Surveyors (RICS). This is because their valuations are the most accurate.

Most Chartered surveyors will charge between £150 and £800.

The Inheritance Tax Act of 1984, is a legal requirement to pay the right amount of tax on probate properties. It is therefore essential to obtain an accurate probate valuation.

Do you have to pay Capital Gains Tax on probate property
When a beneficiary inherits the estate, they must pay CGT on the difference between the value at the date of death and the value when the property is sold.

Do you have to pay Capital Gains Tax on probate property?

However, the amount of Capital Gains Tax that is calculated is based on the increase in property value from the date of death valuation to when it is sold.

When a beneficiary inherits the estate, they must pay CGT on the difference between the value at the date of death and the value when the property is sold.

What Influences Probate Valuation Costs?

Valuation Method

There are two main types of probate valuation: informal and formal. Informal valuations are typically carried out by estate agents and are either free or relatively inexpensive, as they are usually applied to regular residential properties that are not subject to inheritance tax.

However, formal valuations are much more costly, as they are more comprehensive and involve commercial properties such as farms, businesses, and land with potential for development.

Type of Property

The cost of probate valuation is dependent on the kind of property being valued. Fees for valuations are typically higher for commercial properties or those above the threshold for inheritance tax, as a more extensive report needs to be prepared to comply with HMRC standards.

Qualifications

Estate agents are the most cost-effective option for probate valuation, as they provide informal services which do not require a lot of time and effort.

Professional surveyors and other experts, however, take much longer to produce a formal valuation, and their services are more expensive due to the expertise and effort required. Some charge an hourly rate, while others may offer packages tailored to your needs.

Third-Party Costs

In some cases, probate valuation requires more than just estimating the property’s value. Estate agents may just perform a walk-around of the property and come up with a figure, whereas professionals must take into account additional factors, like taxes, debts, and other fees associated with the property.

They must also determine if the deceased was the sole owner of the property or owned it jointly with someone else, and then value only the deceased’s portion. Most probate valuation experts include these tasks in their fees, which is why they tend to be more expensive.

In conclusion, probate property valuation fees usually range from 1-5% of the total estate value. The percentage will depend on who you engage for the valuation, such as a solicitor, surveyor, or estate agent.

How much does a probate valuation cost
Most beneficiaries want to get the lowest possible probate valuation for the property, as this would result in less inheritance tax having to be paid.

Probate Valuations – A Summary

If you are the beneficiary of an estate property that does not have to be sold, you may wonder why it still needs to be valued. This is the best way to determine how much inheritance tax needs to be paid on the estate, even if you are not selling it.

If you do decide to sell the property and it is sold for less than the probate value, you may be able to get a refund from HMRC for overpaying the inheritance tax. This refund can only be claimed if the sale of the property is within four years of the deceased’s passing.

Most beneficiaries want to get the lowest possible probate valuation for the property, as this would result in less inheritance tax having to be paid.

But, if HMRC finds out that the valuation has been intentionally undervalued, you may be required to pay more in legal penalties than you would have to pay in inheritance tax.

To avoid this, it is important to ensure that the valuation is fair and accurate, by getting as many professional opinions as possible.

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