Selling an inherited house in York County, PA: the Register of Wills, inheritance tax, and the disclosure exemption

The call usually starts the same way: a parent died, the house on the east side of York or out in Dallastown is sitting empty, the siblings live out of state, and somebody has just learned that Pennsylvania charges an inheritance tax. Here is the sequence, with the York County offices attached.

Step one: open the estate at the Register of Wills

The York County Register of Wills and Clerk of Orphans’ Court is at 45 North George Street, second floor, York, PA 17401, phone 717-771-9607. If there is a will, the named executor brings the original and a death certificate; if there is no will, a close relative petitions for letters of administration. Either way the Register issues letters and a short certificate. The short certificate is the document a title company needs before the personal representative can sign an agreement of sale or a deed. Without it, nobody can sell the house, cash buyer or not.

Step two: the inheritance tax, and the three month discount

Pennsylvania inheritance tax is charged on what each beneficiary receives: zero percent for a surviving spouse, 4.5 percent for children, grandchildren, and parents, 12 percent for siblings, and 15 percent for everyone else. The return is the REV-1500, filed with the Register of Wills, and it is due nine months after the date of death. Pay any amount within three months and the Department of Revenue gives a five percent discount on the amount paid. On a $220,000 house going to two children, that is roughly $9,900 of tax and about $495 saved by paying early, so it is worth knowing before the first month passes.

The house is valued at fair market value on the date of death. A cash sale at a documented price is a clean way to support that number if the sale happens reasonably close to the death.

Step three: the sale, and why the executor does not fill out the disclosure form

Pennsylvania’s Real Estate Seller Disclosure Law (68 Pa.C.S. Section 7301 through 7315) applies to nearly every residential sale, cash included. Its exemption list, though, covers transfers by a fiduciary in the course of administering a decedent’s estate. An executor or administrator does not complete the property disclosure statement. What the law does not excuse is a defect the fiduciary actually knows about, so if you know the basement floods, say so. We price it in and it never comes back up.

Step four: closing and the transfer tax

The deed from the estate records at the York County Recorder of Deeds, 28 East Market Street, with the one percent Commonwealth realty transfer tax and the local one percent most York County municipalities charge. In our purchases the seller side of that bill is handled inside the closing statement. The proceeds go to the estate account, the inheritance tax gets paid from them, and the Orphans’ Court accounting can close.

What a cash buyer changes

• The contents can stay. We clean out after closing, which matters when the heirs are three states away.
• No repairs, no lender appraisal, and no buyer inspection that becomes a renegotiation.
• Closing follows the short certificate by days, not months, and can wait if the estate needs it to.

The rules that apply to the house itself, borough by borough, are on our York County page.