Selling an Inherited House: Taxes, Timing, and What Actually Happens

Inheriting a house comes with a quiet, stressful question: if I sell it, how much do I owe — and when can I even do it? Here are the real answers, in plain language.

Do you owe tax when you sell an inherited house?

The fear is "I'll be taxed on the whole value." Usually you won't. The key idea is the value at the date of death — that becomes your starting point, so you're generally taxed only on the gain after that date.

• In the US: the property's cost basis "steps up" to its fair-market value on the date of death. If you sell soon after for roughly that value, your taxable capital gain is often near zero. You're taxed only on appreciation between the date of death and the sale.
• In Canada: there's no inheritance tax. Instead, the estate is generally treated as having sold the property at fair-market value on the date of death (a "deemed disposition"), and that value becomes the cost base. If the home was the deceased's principal residence, that gain may be exempt. When you later sell, the gain is measured from the date-of-death value.

What to actually do: get the home's date-of-death value documented (a dated appraisal or a realtor's written market opinion). That single document is what protects you at tax time. Then confirm your specific situation with an estate-experienced accountant — this is the one place a 30-minute consult pays for itself.

Can you sell before the estate is settled?

Usually you can prepare — clean, get it valued, even list — but you typically can't close until the court has confirmed who has authority to sell (the grant of probate / letters of administration). The title transfers through the estate, so the paperwork has to be in place first.

What to actually do: ask the estate's lawyer (or check your jurisdiction guide) whether your grant is required before closing, and how far along it is. Line up the sale so it's ready to complete the week the grant arrives — don't accept an offer with a closing date you can't legally hit.

Who actually sells it — and what if there are multiple heirs?

The executor/administrator sells on behalf of the estate, not the heirs individually, and the proceeds flow into the estate before they're distributed. If several siblings inherit together, the executor coordinates the sale and the split happens at distribution. Decide as a group, in writing, whether you're selling or keeping before you list — disagreements after an accepted offer are where these go sideways.

What it costs and how it's usually sold

• Most inherited homes sell as-is — you rarely need to renovate. A clean-out and basic tidying usually beats a costly reno.
• Expect the normal sale costs (agent commission, legal/closing, any mortgage payoff) to come out of the proceeds, plus possibly a clean-out or estate-sale service for the contents.
• In some US states the sale may need court confirmation (and even an open-court overbid). An agent who's done probate sales will know if that applies.

How to find the right agent

This is not a normal sale, and a normal agent can mis-time the grant or fumble a court-confirmation step. Look for one who has actually closed probate/estate sales in your area, and ask directly: "How many estate sales have you handled here, and do you know my jurisdiction's timing?"

Foxglove lists probate-experienced agents (and the estate accountants who handle the tax side) by region:

→ Find a vetted probate realtor or estate accountant: https://foxglove.estate/directory

Foxglove is a guide, not a law or tax firm. This is general information, not legal or tax advice, and the rules differ by province and state — confirm your situation with a qualified professional. We can help you find one.