Inheriting a rental property can feel like both a blessing and a burden. While it may offer financial opportunity, many people find themselves wondering: can I sell it straight away?
The answer depends on several factors, including probate, ownership status, tenancy arrangements, and tax. Here’s what to consider before deciding how and when to sell.
Legal authority: Rental property probate and ownership
Before you can legally sell an inherited property, you must have the right to do so. If the person who owned the property left a will, the named executor will usually need to apply for a Grant of Probate. This document gives them the authority to manage and distribute the estate, including any property sales.
If the property was jointly owned as joint tenants, things are simpler. The surviving owner automatically inherits the deceased’s share through right of survivorship, which means probate may not be necessary.
Once probate is granted and the title is transferred into your name, you can proceed with a sale. You can even begin marketing the property before probate is complete, but the sale cannot be finalised until the legal process is done.
Understanding the tax position of selling an inherited rental property
Inheriting a property doesn’t automatically mean you’ll owe tax right away. The estate may be subject to Inheritance Tax depending on its total value, but you won’t pay Capital Gains Tax (CGT) until you sell.
The property’s value at the time of death becomes the “base value” for CGT calculations. If you sell soon after inheriting, the gain (and therefore the tax) may be minimal. But if you hold onto it for several years and the value rises, your taxable gain will increase.
You must report and pay CGT on a property sale within 60 days of completion, and if you’re unsure how to calculate this, it’s wise to seek professional advice.
What if the rented property has tenants?
If you’ve inherited a rental property, the next question is whether to sell it with tenants still in place or to regain vacant possession first.
Selling with sitting tenants can be quicker and less disruptive, especially if the tenancy is stable and rent payments are up to date. Our guide on selling with sitting tenants explains how this works and what to watch out for.
However, there are challenges. Tenants have the right to quiet enjoyment, meaning they can refuse viewings or limit access. The property might also appeal mainly to other investors, not residential buyers, which can influence price.
For a deeper look at these considerations, our article on the issues of selling a property with tenants in situ explores how to manage expectations and maintain good relationships with tenants during a sale.
As Jason Harris-Cohen, Managing Director of LandlordBuyer, explains:
“When property comes into someone’s life through inheritance, it’s rarely straightforward. We aim to provide clarity and options, whether you sell with tenants in situ or seek vacant possession, so you can make the decision that fits your situation.”
If you’re unsure which route to take, reviewing real examples from other landlords in our Case Studies section can be a great place to start.
Timing and preparation before selling
Even once probate is complete, it can be worth pausing before rushing to sell. Consider:
- Market conditions – Waiting for a stronger housing market might improve your return.
- Property condition – Small repairs or upgrades can make a big difference in buyer appeal.
- Agreement between beneficiaries – If multiple people inherit, all must agree before a sale can proceed.
- Mortgage or debt – Any outstanding loans secured on the property need to be settled or transferred first.
Taking a little time to prepare can save money and stress later, especially when emotions are still raw after a loss.
You can sell an inherited rental property, but not always immediately. Probate must be granted, ownership must be transferred, and you should understand both tax and tenancy implications.
With careful planning and the right advice, you can turn an inherited property into an opportunity, freeing yourself from management responsibilities, while making confident, informed financial choices.