How to carry out a real estate estimate within the framework of an inheritance?

In the event of death, real estate is often part of the estate. Therefore, the heirs must assess  the market value of the property(ies) and provide this information to the tax authorities within 6 months. The latter will use it to calculate the inheritance tax that the beneficiaries will have to pay. The valuation of a property is a mandatory and important step in an estate file, we explain why.

The importance of real estate valuation in the context of an estate

The period following the loss of a loved one is not always conducive to reflection or discussion about their wealth. However, you will only have a short time to process the estate file and provide the tax authorities with an assessment of the real estate assets of a deceased person. It is sometimes necessary to act precisely as quickly as possible when there are disagreements between the heirs or in the event of debts contracted by the deceased. Thus, the sale of real estate assets may put an end to joint ownership or make it possible to settle creditors.

The estimate allows, first of all, to define the market value of the property or assets forming part of the inheritance. The beneficiaries are then aware of the net selling price and, therefore, the amount they can expect to withdraw from the sale. They can thus agree on the sharing of the result in equal shares. It also happens that one of the heirs decides to acquire the property. In this case, he buys back the shares of the other successors.

Finally, the estimate will be used to calculate inheritance tax. The heirs must then inform the tax authorities of the net selling price of the property or assets forming part of the inheritance. This is why the market value must be measured accurately in order to avoid penalties due to the tax authorities in case of incorrect declarations. Indeed, if you have underestimated the property, you could be penalized by the tax authorities, who will then ask you to regularize the inheritance tax. On the contrary, if you have overstated the property, you may receive a refund of the overpayment of inheritance tax.

Who is entitled to value a property during an inheritance?

It is customary to use a notary to settle succession issues following a death. This expert in law and real estate is one of the only professionals authorized to estimate a property. If he takes charge of the succession file, he also examines the entire patrimony that goes into the inheritance. Sometimes appointed by the deceased before his death, the notary is a privileged interlocutor in everything related to the succession and its process. It has at its disposal a number of dedicated tools, such as databases, of which it is the only one to have access.

The notary is a neutral person who brings real estate expertise, but also legal expertise. Both are very useful in the context of an estate. Nevertheless, do not hesitate to have the property or properties appraised by other specialists such as real estate advisors. This double assessment will offer you the certainty that the market value of the property is the fairest.

The obligation to call on a professional to appraise property during an inheritance occurs when the value of the property in question is greater than or equal to 5000 €.  Below this value, you can make an estimate by yourself.

What is the procedure to follow to estimate your property during an inheritance?

In general, the succession file is in the hands of a notary. The latter will therefore be able to estimate the property or assets that enter into the inheritance according to 2 methods :

  • The notice of value: with the help of computer tools and databases such as the BIEN for Île-de-France or PERVAL for the rest of the territory, the notary will be able to evaluate a property without carrying out an expertise on site. Of course, this method remains relative and can be supported depending on the case by the second approach.
  • Real estate expertise: this time, the notary will carry out an audit of the house and the land by moving in person. This method makes the estimate more reliable since the expertise is more detailed.

If you do not agree with the notary’s evaluation, you can have a second opinion carried out by a real estate specialist. Similarly, the market value is indicative. It does not require you to sell the property at this price. You can therefore put a house up for sale at an amount higher than that announced by the notary.

What are the risks if a property is undervalued?

When it comes to estimating the deceased’s real estate assets, some are tempted to undervalue it. Indeed, the lower the market value of a property, the less inheritance tax will  be paid to the tax authorities.

However, the latter leaves nothing to chance when it comes to the valuation of real estate in the context of an inheritance. It systematically checks the accuracy of the declared market value based  on the selling price of goods of the same nature in a given sector.

To avoid tax adjustment, heirs must provide indisputable data. The best way to successfully estimate real estate assets is to call on a notary or a real estate advisor. You will also need to check carefully that your statements are correct.

How much does the real estate appraisal by the notary cost in the context of a succession?

The real estate appraisal by a notary is not a free act. The latter uses precise and official resources in order to make the most accurate estimate. In some cases, he carries out a real estate valuation, that is to say an audit of the real estate that enters the estate. These acts take time, so it is natural that they have a cost. Count between 150 € and 400 € depending on the case.  Obviously, if the notary’s estimate is part of a sales process of which he is the executor, the cost of the appraisal will be added to the total amount of estate management.

Should you call on a real estate advisor to estimate your property?

The intervention of a real estate advisor to estimate your property is not mandatory, but it can be useful.

If you have called on a notary, the real estate advisor can provide you with a second opinion. He will then be able to verify the accuracy of the estimate of the real estate assets that enter into the inheritance. Thus, you will be assured of having the right market value.  This will save you from having to regularize inheritance tax to the tax authorities in case of erroneous declaration.

Finally, soliciting a real estate advisor is an asset if you want to sell the property quickly and at the right price.

See more guides

Definition of the market value of a property The market value corresponds to the price of a property in a hypothetical sale. Several factors are to be taken into account to calculate it.