Taxes on Inherited Property in Georgia: What You Need to Know

Inheriting a home can seem glamorous in theory, but in reality, inheritance can be messy and confusing. Being the heir of a property can present an opportunity for you to make some money, but it also comes with the realities of processing the loss of a loved one, figuring out what to do with the property, and dealing with financial matters such as repairs or taxes. Luckily, taxes on inherited property in Georgia are designed to avoid any additional burden in the heir, but it is still important for you to understand the financial consequences of selling an inherited property in order to figure out how best to handle your inheritance. Here is a simple but thorough guide to Georgia’s taxes on inherited property.

Does Georgia have an inheritance tax?

Georgia has not had an inheritance tax since July of 2014. There are only six states in America that enforce an inheritance tax as of 2024, and in these states, heirs must pay a tax on their inheritance after they legally inherit it, regardless of what they choose to do with their new assets. Because Georgia no longer imposes this tax, you could theoretically walk away from the probate process with legal ownership of your inherited property and no taxes.

Remain aware of payments that are inherited with the property

Even though there are no immediate taxes on inherited property in Georgia, you may still have to make other payments. The terms of any property taxes, liens, and mortgage payments are often settled during the probate process before the property passes into your legal ownership. Debts are often settled with the funds of the estate itself before it is passed to you, but certain payments may fall to you depending on the situation, such as mortgage payments and property taxes. Stay as involved as possible in those proceedings to remain aware of any payments or debts that might pass onto you with the inherited property. It might also be wise to consult a legal or tax professional during probate to make sure you have the best understanding possible of the property’s finances.

How do federal estate taxes work and do I have to pay them?

An estate tax is a tax that is levied on inherited estates that exceed the value of the filing threshold of the year that the property’s previous owner died. This means that inherited estates must be worth a certain amount of money in order to be taxed. For instance, if the estate’s previous owner died in 2024, their estate would have to be worth over $13.61 million in order to be taxed.

Assuming that you didn’t recently inherit a multi-million dollar estate, the federal estate tax will not apply to you, so that is one less worry about taxes on inherited property for you!

If you do happen to inherit such a large estate, and estate planning tax professional will be able to help you make sure you pay a fair amount and that you are able to apply for any deductions you might be eligible for.

When do I have to pay a capital gains tax?

A capital gains tax only applies if you sell your inherited property for a profit, so if you retain ownership of the property or sell it without turning a profit (see below for details), you won’t have to worry about paying a capital gains tax.

This kind of tax works differently for inherited homes than it does for other properties. For other properties, you will be taxed on the difference between the original purchase price of the property from the more recent selling price. For inherited homes, you would instead calculate using a “stepped-up cost basis,” meaning that you will be taxed on the difference between the fair market value of the property at the time of the owner’s death and the recent selling price.

For example, if your deceased relative originally bought the property $170,000, but the house was worth $350,000 at the time of their death, you would subtract $350,000 from the selling price, rather than subtracting $170,000. If you sold the inherited property for $400,000, you would only be taxed on the $50,000 profit you made in the sale.

Can I avoid capital gains taxes?

There are plenty of ways that you can avoid capital gains taxes. One of the simplest methods is to retain ownership of the property rather than selling it. You can then take over the residence yourself or use it as an investment opportunity by renting it out. However, this endeavor can be a lot of effort, especially if you are dealing with a property that requires repairs, or if you are unfamiliar with acting as a landlord, which can be a big job.

Another option is to sell the property at exactly the fair market value, which you can figure out during an appraisal. If the selling price doesn’t exceed the fair market value of the property at the time of the pervious owner’s death, you won’t have to pay any capital gains tax. However, you should account for the cost of any necessary repairs, mortgage payments, or agent commissions if you are listing the property. Even selling a house in Georgia’s high-demand market can take a good bit of time and money.

If you’re looking to avoid the hassle of listing, consider selling to a local cash homebuyer, who can make you a fair cash offer on the market value of your inherited property without requiring any repairs, commissions, listing, or showings. You can close within a week and walk away with cash in your hand and taxes out of your mind.

Conclusion

Inherited a property can be a lot to process, but understanding taxes on inherited property in Georgia can make your new ownership of a house a lot easier to handle, especially now that you know you won’t have to worry about an inheritance tax. If you find yourself stuck or confused about what taxes might apply to your new inheritance, don’t hesitate to contact a tax professional to guide you.


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If you want to learn more, we invite you to visit our How It Works page. Here, we offer full transparency about our homebuying process, including details about exactly how we calculate our offers. You can also check out Our Company page to get to know our team, our credentials, and our experience. Fill out the form below to get a no-obligation cash offer started now!

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