Selling an Inherited House in New York: The Complete Guide

Someone you loved passed away. And now, on top of the grief, there is a house. Maybe it is across town. Maybe it is across the state. Either way, the property taxes are already running, the insurance needs updating, and you are not sure where to start.

You are not alone. Thousands of New Yorkers inherit property every year. Most have never sold a house before. And New York's legal process makes it more complicated than it needs to be.

Here is exactly what to do, step by step.

Step 1: Determine if Probate Is Required

Probate is the legal process that transfers ownership from the deceased to the heirs. In New York, probate is required unless:

• The property was in a living trust
• The property had a transfer-on-death deed
• The property was held in joint tenancy with right of survivorship

If the property was solely in the deceased person's name (which is the most common situation), you will need to go through probate. In New York, this process typically takes 7 to 12 months.

You will need to file the will with the Surrogate's Court in the county where the deceased lived. If there is no will, the court appoints an administrator under New York's intestacy laws.

Step 2: Understand the Tax Situation

Good news first. When you inherit a property, you get what is called a "stepped-up basis." This means the IRS treats the property's value as the fair market value on the date of death, not what the original owner paid for it.

So if your parent bought the house for $100,000 in 1985 and it is worth $400,000 today, your tax basis is $400,000. If you sell it for $410,000, you only pay capital gains tax on the $10,000 gain. Not the $310,000 difference from the original purchase price.

Other taxes to watch for:

• New York estate tax: Applies to estates over $6.94 million (2026 threshold)
• Property taxes: These keep running. If nobody pays them, the county can place a lien on the property
• NYC transfer tax: 1% for properties under $500K, 1.425% above. This applies when you sell

Step 3: Deal With Multiple Heirs

This is where things get emotional. If you inherited the property with siblings or other family members, everyone has a say. And not everyone will agree.

Common scenarios:

• All heirs agree to sell: The simplest path. Everyone signs off and proceeds split according to the will or intestacy law
• One heir wants to keep it: That heir can buy out the others at fair market value
• Heirs cannot agree: You may need a partition action, a court-ordered sale. This is expensive and slow, but sometimes it is the only option

The longer a property sits in limbo between disagreeing heirs, the more it costs everyone. Property taxes, insurance, maintenance, and potential vandalism or deterioration eat into the value every month.

Step 4: Decide How to Sell

Once you have legal authority to sell (through probate or otherwise), you have three options:

Option A: Sell to a Cash Buyer

Fastest option. You sell the property as-is, no repairs or cleanout needed. This is especially helpful when the house has been sitting vacant, needs significant work, or when multiple heirs want to close quickly and split the proceeds. Typical timeline: 14 to 21 days after probate clears.

Option B: List With an Agent

If the property is in good condition and you are not in a rush, listing on the market may get a higher sale price. But factor in 5 to 6% commissions, repair costs, staging, and 3 to 6 months of carrying costs.

Option C: Rent It Out

If the property is in good shape and in a strong rental market, keeping it as an investment can generate ongoing income. But this means becoming a landlord, which comes with its own set of responsibilities and costs.

Common Mistakes to Avoid

1. Waiting too long to start probate. Every month you delay costs you money in taxes and maintenance
2. Not getting a professional property valuation. You need to know what it is actually worth, not what Zillow says
3. Ignoring property insurance. If the home is vacant, standard homeowner's insurance may not cover it. You need a vacant property policy
4. Making expensive repairs before deciding to sell. If you are selling to a cash buyer, you do not need to fix anything

Frequently Asked Questions