The emotional toll of losing a loved one can be overwhelming, and it is often compounded when you find yourself grappling with complicated financial and legal matters. You may wonder, “If I inherit a house, can I sell it?” Many people face a number of complex issues, especially if you’re inheriting a house with siblings in Canada. It presents a series of logistical hurdles that require careful attention and planning.
Common Challenges When Inheriting a House with Siblings in Canada
Different Objectives
Siblings may have varying intentions for the inherited property. For instance, siblings inherit a house, and one wants to sell because they have immediate financial obligations. This could be anything from paying off debt to funding education or other investment opportunities requiring quick capital. That sibling will lean towards a quick sale to resolve those needs. On the other hand, some siblings might have a strong sentimental attachment to the property. For them, selling might be emotionally taxing, and they may advocate for keeping it within the family. They might ask, is it better to sell or rent an inherited house? Discuss timelines openly among all siblings to understand everyone’s priorities and constraints.
Financial Burden of Upkeep
Inheriting a house with siblings in Canada involves ongoing costs. The term maintenance covers many financial responsibilities, often underestimated at the outset. This includes not just routine upkeep like lawn care and minor repairs but also more substantial costs. For example, an older property may require significant investment in infrastructure updates, like plumbing or electrical work. Utilities, including electricity, water, and possibly gas, contribute to the financial weight. Other recurring costs, such as homeowner’s association fees or any required insurance premiums, should also not be overlooked.
“When you want to sell an inheritance that you own with a brother or sister, and you don’t want to be bogged down in the minutia, you will need to check your emotions at the door,” said Shaun Martin, a home buyer in Denver, CO. He continued, “Trust me when I say family can get weird when money is involved so remain calm as your siblings voice their opinions. If you do this, the selling process becomes much clearer, and you are more likely to get what you want. If you treat selling inherited property like a business transaction, including writing down what you want from the deal, I can assure you the sale will be much quicker and easier for you.”
Readying the Home for Sale
The traditional route of preparing a home for sale with the assistance of real estate agents can introduce multiple layers of complexity and potential stress among siblings. Real estate agents often recommend various renovations or repairs to make the property more marketable. While such improvements may increase the property’s value, they also require an upfront investment of both time and money. Decisions around these repairs can become highly contentious among siblings, especially when there are differing opinions on what improvements are essential and what may be considered unnecessary expenditures. Staging the home for prospective buyers is another consideration that can lead to disagreements. The costs involved in hiring professionals for staging can add up, and opinions may diverge on whether this investment is worth making.
Benefits of Selling an Inherited Property Privately
Professional cash home buyers help homeowners sell their properties quickly and easily. They offer a streamlined, efficient route to selling your property, often closing deals within a matter of days. They buy houses in any condition. Their expertise in market analysis and property valuation ensures a fair, albeit expedited, transaction that benefits both parties.
Transactions are Fast and Straightforward
When inheriting a house with siblings in Canada, selling privately is much faster than traditional real estate transactions, turning the property into liquid assets that can be quickly divided among the siblings. One of the complexities of a traditional sale is that it often relies on third-party financing. The deal can fall through if the buyer’s loan isn’t approved. Cash sales also require less administrative bureaucracy. There are fewer documents to review, sign, and understand, simplifying the process.
Avoid Conflict Over Renovations
Decisions around repairs and renovations can become contentious points of discussion, especially if there are differing views on what is essential versus what constitutes an unnecessary expense. An “as is” sale sidesteps these debates entirely. Opting for a private sale with a professional cash home buyer can make the process more straightforward and efficient. You can sell the property “as-is,” bypassing the hassle and expense of repairs or upgrades.
No Commissions and Other Hidden Costs
Selling a property through conventional means, such as using a real estate agent, often involves a web of fees and expenses that can be difficult to anticipate fully. One of the most notable costs is the real estate commission, typically amounting to approximately 5-6% of the property’s sale price. This commission is generally divided between the selling and buying agents.
Do Canadians Pay Inheritance Tax?
You do not pay a direct inheritance tax when inheriting a house with siblings in Canada. However, that doesn’t mean you’re entirely off the hook regarding taxes. If and when you decide to sell the inherited property, you could face capital gains tax.
Canadian tax law considers that the estate has “sold” the property to you at its fair market value at the time of the previous owner’s death. This value becomes the new “cost basis” for the property. If you sell the property later on and its value has increased, you’ll owe capital gains tax on the difference between the sale price, and this cost basis. So, while you may not pay inheritance tax, you could have tax obligations down the line when you sell.
If you are inheriting a house with siblings in Canada and seeking a stress-free, transparent way of selling an inherited house in Ontario, turn to SLG Home Buyer. Our seasoned team offers years of industry expertise to facilitate a seamless private sale, regardless of your property’s condition. Experience a process devoid of hidden fees, commissions, or obligations—contact us today.