After someone passes away, one of the first steps in handling their affairs is to value their estate for probate. This is essential to ensure the correct amount of Inheritance Tax is paid.
Property is often one of the most valuable assets within a person's estate. To ensure it is valued accurately, a professional RICS Valuation is recommended, costing £452* on average. You will also need to value all other assets, such as jewellery, cars, collectables, art and antiques.
In this article, we discuss more about property valuations for probate and how other valuable items can be valued.
Why Is a Probate Valuation Necessary?
Valuing the assets of the person who has died is an essential part of applying for probate. Before you can apply for probate, you must calculate the total value of the estate to determine if any Inheritance Tax (IHT) is due.
Every estate has a tax-free allowance of £325,000. If property or assets are given to children and grandchildren, an additional £175,000 allowance is provided.
To ensure accuracy, a RICS Valuation is recommended when valuing property. This is the most reliable method and helps to avoid the risk of an HMRC investigation caused by incorrect or estimated valuations.
An undervalued property can also lead to unexpected tax consequences. If the property is sold after probate is granted at a higher price than originally declared, Capital Gains Tax (CGT) may be payable on the difference. A professional valuation helps reduce this risk by establishing a defensible market value from the outset.
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Costs Involved in Valuing an Estate for Probate
What is referred to as an "estate" during probate is all money, property and personal possessions owned by the deceased at the time of their death.
The cost of valuing an estate for probate will depend on whether you use a valuer registered with the Royal Institution of Chartered Surveyors to value any property. It will also depend on whether you need specialists to value certain items.
RICS Property Valuation Costs
A Valuation Report costs around £452*. The cost could be as low as £160 and as high as £600 depending on the property value and size.
A RICS probate valuation is more accurate compared to an estate agent’s valuation and complies with the RICS Valuation Global Standards 2017.
Keep in mind that a RICS Valuation is only for valuing property. All other assets that make up the estate must be valued separately.
Is this Valuation Right for Me?
A RICS Property Valuation is recommended for accuracy and clarity. If an estate agent, online property portal or auction house is used, HMRC may dispute the valuation. This is most likely if they suspect the home is being undervalued to avoid Inheritance Tax.
If the person's estate passes to a spouse by the Right of Survivorship, probate is usually required and the surviving spouse may be exempt from IHT. As a result, a valuation may not be required.
In the event the property was owned as tenants in common, a valuation will be required to determine the deceased's portion of the value.
Auction Houses and Specialists Valuation Costs
Auction houses can provide valuations for a range of different items. Usually, this service (especially if it's free) is designed for auction sale purposes. If you don't plan on selling the items, you may want to consider hiring a specialist appraiser.
Gold, jewellery and watches can be valued by members of The National Association of Jewellers. Additionally, The British Antique Dealers' Association has a list of members who can value antiques and specialist items. Costs for these valuations vary, depending on the company, the number of items and the time the valuation takes.
World-renowned Christie's offers a free online valuation service for up to 6 items, with the option to speak to a professional if you need more items appraised. Bonhams hosts complimentary valuation events, in addition to a dedicated valuation service.
Solicitor Costs for Probate
For the probate process itself, it is recommended that you use a solicitor to assist you with the estate administration. While they cannot directly value items, they can provide guidance on getting items valued and the Inheritance Tax (IHT) implications.
On average, solicitors charge between 1.5 - 2.5% of the estate's total value for probate services.
Factors Influencing Property Valuation Costs
Here are some factors to keep in mind that can affect probate property valuation costs:
Type of Property
The size and type of property is perhaps the biggest influence on the cost. Properties that are larger, higher value or more complex in any way are likely to have higher valuation costs.
Commercial properties can be more complicated to value which will increase the cost.
Geographic Location
Valuation costs fluctuate based on the location. Valuations carried out in London and other urban areas will be more expensive compared to smaller towns or areas.
Valuation Method
Informal valuations from estate agents, auction houses or online property portals are usually free. However, the price of a formal RICS Valuation will reflect the experience and knowledge the valuer has.
Informal valuations are useful, but not as reliable. If the estate is minimal and below the tax threshold, an informal valuation can be used.
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Regulated valuation surveyors
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How to Choose a Probate Valuer
It’s important to choose a property valuer that will best meet your probate needs. Here are some considerations to take into account:
What Are Their Certifications?
Probate is a complicated legal process, this is why it’s essential to choose a professional valuer. It is recommended that you use a valuer who is RICS-accredited. You could also consider an RPSA-registered firm.
Are They Experienced?
A valuer with experience in probate properties is recommended. It is especially useful if they have experience with your type of property and are familiar with the local area and property market.
Do They Have Good Reviews?
Previous customer reviews are one of the best ways to get an idea of the service a company provides. Ensure you check their website, social media and any review sites such as Trustpilot while researching a valuer.
How Do They Compare?
Comparing different valuation providers is essential to finding the best valuer for your needs. Comparison services like Compare My Move can put you directly in touch with the experts. This allows you to discuss your requirements and get a range of prices.
Compare Probate Valuation Quotes
We can connect you with up to 6 valuation surveyors and help you save up to 70% on your costs. Simply fill out our free comparison form to get started today.
All our surveying partners have in-depth market knowledge and have passed our strict verification process. We only work with RICS-registered valuers, ensuring they follow the RICS Red Book Valuation, the industry standard for valuations.
Frequently Asked Questions:
Can Probate Valuation Fees Be Covered by the Estate?
If you use a surveyor for your probate valuation, these costs must be paid upfront. However, as with any other probate-related costs, it is possible to receive the funds back from the estate after the probate process has been completed.
Is a Probate Valuation Required for All Properties?
A RICS property valuation is not a legal requirement but it is strongly recommended. Not only will it be more accurate, but any other type of valuation (such as from an estate agent) may be disputed by HMRC.
How Long Does a Probate Valuation Take?
According to Crest Chartered Surveyors, a probate property valuation takes between 30 minutes to two hours. The valuation report is usually delivered within 6 working days.
Valuing all of the deceased person's assets can take anywhere from a few days to weeks depending on the volume of items and whether specialists need to be consulted.
*Based on the average service costs for Compare My Move users. See how our data works.
