Selling the parental home before the occupant’s passing can be both financially and practically beneficial. One advantage, for example, is that you can save on taxes. At the same time, it can also avoid challenges such as discussions due to ambiguities with heirs and a lengthy sales process surrounding the sale of the house after passing. This article discusses the pros and cons surrounding the sale of the parental home before passing.
Why sell the parental home before death?
Some people choose to sell the parental home before their passing. This often has to do with financial benefits. Below we discuss some important issues that may apply.
Inheritance and transfer taxes
The most important financial consideration when selling the parental home is the tax burden. In fact, it can save you taxes when the house is sold before death.
Inheritance tax avoidance
When a home belongs to the estate, heirs must pay a high amount of inheritance tax. By selling the home in advance, this can be avoided. This is financially attractive, especially if it is a home with a high resale value.
Transfer tax on sale of family
When children buy the parent’s home, they must pay transfer tax. Only with strategic planning can this amount be reasonably limited.
In order to make the best decision in this regard, it is wise to consult a tax advisor so that the financial implications are properly identified.
Other benefits of selling the parental home before death
In addition to tax advantages, there are other reasons to sell the parental home before passing:
Preventing lengthy sales process
After the death of a parent, heirs must sell or divide the property among themselves. It can cause problems when this is not properly agreed upon in advance. It can also be difficult to focus on this when you are also dealing with a host of other emotions.
Financial resources for elderly care
Selling the home can help pay for care, such as at a nursing home or for home care.
Fair distribution of inheritance
The proceeds can be distributed directly to the heirs when the parent is still alive. This potentially avoids any conflicts surrounding the inheritance.
The disadvantages of selling before death
Although selling the parental home early has many advantages, there are also disadvantages you should consider.
Possible disadvantages of selling house before death
Emotional impact
It may be difficult for the parent to distance themselves from the home due to memories, for example, or that the parent feels less secure in their living situation.
Stress of arranging the sale
Everything involved in selling a home such as contracts, appraisals, viewings, etc. can be stressful, especially for older people.
Buying your parents’ home yourself
Sometimes children want to buy their parents’ house themselves. This may be because of the emotional value the house has for the children. Also, it is naturally a little easier to buy a house from a family member, especially in a tight housing market. However, there are still some things to consider.
Arranging funding
For this, you need a mortgage and this works the same as for a regular home.
Determining market value
An appraiser can help set a fair price. A favorable sale price can also be agreed upon with the other heirs.
Tax implications
The purchase of the parental home may affect transfer and gift taxes. These depend on the purchase structure.
Who is responsible for selling the house?
The responsibility for selling the house lies with the current owner of the home. Upon death, the heirs are responsible for the house. A will can help to have the sale properly arranged in advance so that there is no disagreement after death. Also, in the event of death, the heirs must clear the house themselves. Learn more about who is responsible for emptying the house after death here: Emptying house after death – Who is responsible?
Steps for preparing the house for sale
When you decide to sell a home, proper preparation is important. You can follow some practical steps to prepare the home for sale. By properly tidying up the home and making it attractive, this can be beneficial to the sale. Below we explain what you can do:
- House clearance and cleaning: Make sure the house is tidy and left neat.
- Maintenance and repairs: See if the house is still in good condition and replace any damages to increase its value.
- Appraisal: Have the market value of the house determined by an appraiser.
- Engage real estate agent: A real estate agent can help sell the house.
- Photography and advertisement: Good photos and attractive advertisements create more interest.
Need help vacating and cleaning your home? We can get your home ready for sale on short notice! Contact us for a free quote. We can get you home ready for sale at a competitive price.
What to do with the contents?
When selling the parental home, the contents play an important role. Here are some important tips to consider:
Divide among family members
Items with emotional value or valuables can be divided among the heirs. Take your time with this.
Sale of furniture and other possessions
Furniture of value you may be able to sell through secondhand stores or online, for example.
Donations
There are many organizations that accept furniture and other items, for example, thrift stores.
Professional house clearance
Do you have a lot of stuff you want to get rid of? Then you can opt for a professional house clearance. This means you don’t have to dispose of your old stuff yourself. This can save a lot of time and stress. Contact us for a fast and efficient house clearance.
