Key Takeaways

Inherited property receives a “step-up in basis” to its fair market value at the time of death.
You only pay capital gains tax on the appreciation that occurs after you inherit the home.
Maryland maintains a $5 million estate tax exemption in 2026 for individual residents.
Brickfront Properties and Construction provides expert guidance for selling inherited homes in the DMV.

Losing a loved one is difficult, and managing their estate adds extra stress. Many heirs ask, “how much tax will I pay when I sell an inherited house?” Understanding the tax rules helps you maximize your final inheritance. The IRS and local DMV laws provide specific benefits for inherited assets.

The Power of “Step-Up in Basis”

The most significant tax benefit for heirs is the step-up in basis. In 2026, the IRS resets the property’s “cost basis” to its current market value. Most traditional sales use the original purchase price to calculate taxes. For inherited homes, your tax basis is the value on the day the owner passed away. This rule eliminates decades of capital gains taxes for the heirs.

Talk to Brickfront Properties to learn how taxes work when selling inherited property.

Capital Gains Tax on Inherited Sales

You only pay capital gains tax if the property value increases after you inherit it. If you sell the home immediately for the appraised value, you typically owe $0 in taxes. If you hold the property and the value rises, you pay tax on that specific profit. Long-term capital gains rates for 2026 remain favorable for most sellers.

State Taxes in Maryland, Virginia, and D.C.

The DMV region has diverse tax laws for inherited property.

Virginia: Virginia has no state estate tax or inheritance tax. This makes the sale process straightforward for local heirs.
Maryland: Maryland has a $5 million estate tax exemption. Most close relatives are also exempt from the 10% Maryland inheritance tax.
Washington D.C.: The District has an estate tax exemption of approximately $4.98 million for 2026.

Maximizing Your Property Value

Many inherited homes require significant updates before they are ready for the market. Our team helps families fix homes for profit to ensure the highest possible sale price. We specialize in DMV probate real estate and understand the local court requirements. Whether you need a quick cash offer or a full renovation, we provide professional support.

Why Work With Brickfront?

Brickfront Properties and Construction simplifies the transition for grieving families. We offer a transparent process for selling an inherited house in any condition. Our experts handle the details so you can focus on your family.