When a property forms part of an estate, Inheritance Tax (IHT) reporting often depends on one key figure: the property’s value at the date of death. Getting that number right matters—not just for tax, but for fairness between beneficiaries, smooth administration, and avoiding unnecessary delays if questions are raised later.
A property valuation for IHT is effectively a retrospective market valuation. It aims to reflect what the property would reasonably have sold for on the open market at the date of death, based on evidence from that period and the property’s condition and circumstances at that time.
1) Why an IHT property valuation is so important
For most estates, the home is the single largest asset. The IHT valuation can affect:
- whether IHT is payable and how much
- how the estate is distributed fairly between beneficiaries
- whether the estate accounts and paperwork are accepted without delay
- the likelihood of future disagreements (beneficiaries, executors, HMRC queries)
A good valuation provides a clear, supportable figure so the estate can move forward with confidence.
2) The valuation date: it’s almost always the date of death
This is the most common misunderstanding.
For IHT purposes, the relevant value is typically the value at the date of death, even if:
- the property is sold months later, or
- the property is cleared/refurbished afterwards, or
- the market changes
A later sale price does not automatically mean the IHT valuation was right or wrong—it may simply reflect market movement or change in condition. However, having a well-evidenced valuation makes it much easier to explain differences if they arise.
3) What does the valuer assess for an IHT valuation?
An IHT valuation typically considers:
A) The property’s characteristics
- location and micro-location
- type (flat/house, purpose-built/conversion)
- accommodation, size, and layout
- outside space, parking, storage
- floor level and lift (for flats)
B) The property’s condition at the date of death
This is critical. The valuation should reflect:
- level of maintenance
- modernised vs dated interiors
- any visible defects (damp, roof issues, cracking, leaks)
- whether it was vacant or occupied
- whether there were any known problems affecting saleability
C) Tenure and legal factors
Especially for flats:
- lease length at the valuation date
- ground rent and service charges
- major works plans
- restrictions that affect demand (subletting, pets, alterations)
Legal and running-cost factors can make a big difference to value and buyer appetite.
4) How the valuer arrives at the figure: comparable evidence
Most residential valuations are driven by comparable sales—similar properties that actually sold in the local market.
For IHT, the key is that the comparables should be:
- close to the valuation date (where possible)
- similar in location and property type
- similar in size, layout, and condition
- comparable in tenure/lease terms (for flats)
Where exact “like-for-like” comparables don’t exist (common with unusual properties or in thin markets), the valuer relies on the best available evidence and explains adjustments clearly.
5) The role of condition: why it can change the figure dramatically
Condition is often the biggest swing factor in IHT valuations. Many inherited homes are:
- dated,
- under-maintained, or
- in need of repair.
Buyers usually do not deduct repair costs pound-for-pound; they often reduce further for hassle and risk. That’s why an IHT valuation should be realistic about:
- outdated kitchens/bathrooms
- damp/mould issues
- roof or gutter defects
- visible cracking or movement concerns
- poor electrics/heating
- tired windows
Where condition is uncertain or defects are suspected, evidence becomes even more important.
6) What information helps make an IHT valuation robust?
Executors can make the process smoother by providing:
A) The essentials
- full address and property type
- date of death
- whether the property was vacant or occupied
- any known issues (leaks, damp, disputes)
B) Evidence of condition at the date of death
Especially useful for retrospective accuracy:
- dated photos or videos
- old surveys (Level 2/Level 3)
- inventories/check-in reports (if rented)
- estate agent listing details (if marketed soon after)
- invoices for works done shortly before/after (to show what changed)
C) For leasehold flats
- unexpired lease term
- ground rent and review pattern
- latest service charge accounts/budget
- major works notices (if any)
Good leasehold information can prevent avoidable uncertainty in the valuation.
7) Estate agent valuations vs surveyor valuations for IHT
Estate agents can provide useful “market feel,” but for IHT you often want something that is:
- clearly anchored to the date of death
- supported by comparable evidence
- transparent in assumptions
- suitable for scrutiny if questions arise
That is why many executors prefer a professional surveyor valuation for IHT reporting, particularly where the property is high value, unusual, in disrepair, or likely to be contested.
8) What if the property sells after the valuation?
It’s common to value first, then sell later. If the sale price differs from the IHT valuation:
- the market may have moved
- presentation may have changed (clearing, decorating)
- repairs may have been completed
- the buyer pool may have been different (cash buyer vs mortgage buyer)
A robust valuation helps explain why the IHT figure was reasonable at the valuation date.
9) Common pitfalls to avoid
Pitfall 1: Using today’s value by mistake
The valuation must relate to the date of death, not current market conditions.
Pitfall 2: Ignoring condition at the valuation date
If the property has been improved since, the IHT valuation should not assume today’s improved condition.
Pitfall 3: Missing leasehold costs and lease length
For flats, this can materially distort value.
Pitfall 4: Overreliance on online estimates
Online estimates rarely reflect condition, lease terms, or the exact historic market period.
10) The takeaway
A property valuation for Inheritance Tax is a retrospective market valuation at the date of death, supported by comparable evidence and a realistic view of the property’s condition and legal position at that time. Done properly, it supports accurate IHT reporting, fair distribution of the estate, and smoother administration with fewer disputes.
Need an IHT property valuation?
Email mail@howorth.uk or call 07794 400 212. Tell us the property type and location and the date of death. If you have any dated photos, old surveys, or lease details (for flats), share those too—we’ll explain the process and help you obtain a clear, evidence-based valuation suitable for IHT reporting and estate administration.