Inheriting a House in New York: Probate, Taxes, and Selling

You inherited a house in New York - here’s what actually happens

Start by taking the pressure off: nothing about the house has to be decided this week. It will not be seized, the mortgage cannot be called due just because the owner died, and the process - while New York’s courts move slower than most - is well-worn and predictable.

In New York, estates run through Surrogate’s Court in the county where the person lived. Whether the house itself has to go through that process depends on how it was titled: trusts, joint ownership, and (since 2024) transfer on death deeds all bypass court, while a house solely in the deceased person’s name usually does not.

If you live in another state - very common with inherited New York property, from upstate family homes to city co-ops and brownstones - all of this can be handled remotely with a New York attorney and a good local agent.

Does it go through probate?

Not always. The paths around Surrogate’s Court:

• Living trust. A house held in a revocable living trust passes outside court. The successor trustee transfers or sells it directly.
• Transfer on death deed - new since July 2024. New York finally adopted TOD deeds (Real Property Law 424). If the owner signed one before two witnesses and a notary and recorded it before death, the named beneficiary takes the house without probate. Because the law is new, relatively few estates have one yet - but always check the county land records.
• Joint ownership with survivorship. Property held as joint tenants with right of survivorship, or by spouses as tenants by the entirety, passes automatically to the survivor.
• Small estate (voluntary administration). New York’s shortcut applies only to personal property worth $50,000 or less. It does not transfer real estate - so a solely owned house cannot use it.

If none of those apply, the estate goes to Surrogate’s Court: probate if there is a will (the executor gets “letters testamentary”), or administration if there is not (an administrator gets “letters of administration,” with heirs determined by New York’s intestacy statute).

One quirk worth knowing: under New York law, title to real property actually vests in the heirs or devisees at the moment of death - but in practice, nobody can deliver marketable, insurable title to a buyer without the Surrogate’s Court paperwork behind it.

The New York probate timeline

Expect a straightforward estate to take roughly 9 to 18 months, with New York City boroughs and busy suburban counties often at the slow end:

1. Filing (month 1-2). The will, death certificate, and petition go to Surrogate’s Court. All “distributees” (the people who would inherit if there were no will) must be notified and either sign waivers or be formally cited - chasing signatures from scattered relatives is a common early delay.
2. Letters issued (months 2-6). Once the court is satisfied, the executor or administrator receives letters. Court backlogs drive most of the variance here.
3. Administration (months 3-12). Assets are gathered, debts and taxes handled. Creditors effectively have seven months from the issuance of letters, so executors typically wait out that window before making major distributions.
4. Closing the estate (month 9+). Most estates settle informally with receipts and releases from beneficiaries; a formal judicial accounting adds substantial time.

Contested wills, missing heirs, or real property complications (tenants in the house, co-op board issues) can push well past two years.

Taxes when you inherit

Two different questions here, and New York is one of the few states where the second one has teeth.

No inheritance tax. New York does not tax you, the heir, for receiving property.

But there is a New York estate tax. The estate itself owes tax if it exceeds the state exemption - $7,350,000 for deaths in 2026 (indexed annually). And New York has the infamous cliff: if the taxable estate exceeds the exemption by more than about 5%, the entire estate becomes taxable, not just the amount over the line. For 2026 that cliff sits at roughly $7.7 million. Most families never approach these numbers, but with New York real estate values, an estate holding a house plus retirement accounts can get closer than people expect. Federal estate tax starts far higher - $15 million per person in 2026.

The stepped-up basis is the fact that matters for almost everyone. When you inherit, the house’s cost basis for capital gains purposes resets to its fair market value at the date of death. A brownstone bought for $150,000 that is worth $1.2 million when you inherit it gives you a $1.2 million basis. Sell near that price soon after, and there is little or no capital gains tax - decades of appreciation are never income-taxed. This is federal law and applies in every state.

If you keep the property and sell later, you pay capital gains only on the growth after the date of death - one more reason to document the date-of-death value carefully.

Can you sell during probate in New York?

Generally yes, once the executor or administrator has letters:

• With a will. Executors commonly have the power to sell real estate under the will (or under their statutory powers) without a separate court order. The sale proceeds flow into the estate for distribution.
• Without a will. Administrators can usually sell as well, though where title has vested in multiple heirs, title companies may want all heirs to join the deed or the court to bless the sale - practice varies, and this is where an experienced attorney earns their fee.
• Restrictions in the will, or beneficiaries who object, can force the question in front of the Surrogate.
• Co-ops are different. A co-op apartment is personal property (shares plus a lease), not real estate - the sale still needs board approval, and boards move at their own pace.

Buyers, meanwhile, treat estate sales as ordinary listings. Nothing about probate prevents a full-price market sale.

If you live out of state

New York expects out-of-state heirs and executors:

• A non-resident can serve as executor. Courts may require a bond in some cases (and a non-citizen non-resident generally cannot serve alone), but for typical families this is manageable.
• Nearly everything legal happens through your New York attorney - most heirs never set foot in Surrogate’s Court.
• The practical work is what needs local hands: securing and winterizing a vacant house (burst pipes are the classic upstate disaster), insurance that stays valid on an unoccupied home, clearing out belongings, and preparing the property for sale.
• A local agent who knows estate sales acts as your presence: regular property checks, cleanout and contractor coordination, honest advice on selling as-is versus renovating, and managing the sale while you stay put.

What’s the house worth?

Everything - the estate tax question, your stepped-up basis, and the keep-or-sell decision - starts from an accurate value. Automated estimates struggle badly with exactly what people inherit in New York: original-condition houses next to gut-renovated comps, two- and three-family buildings with tenants, and co-ops where the algorithm cannot see the building’s financials.

Get the fair market value as of the date of death documented (it fixes your basis and feeds any estate tax return), then a current as-is number versus a fixed-up number. A local agent can pull all three for free.

Frequently asked questions

How long does probate take in New York? Commonly 9 to 18 months for an uncontested estate; New York City and busy counties trend slower, and the seven-month creditor window sets a practical floor. Trust assets and TOD deed property skip the process entirely.

Does New York have an inheritance tax? No inheritance tax on heirs. There is a New York estate tax on estates above $7.35 million (2026), with a cliff that can tax the entire estate once you exceed the exemption by about 5%.

Do I pay capital gains tax when I sell the inherited house? Usually only on appreciation after the date of death, thanks to the federal stepped-up basis. Sell soon after inheriting at roughly date-of-death value and there is typically little or no capital gains tax.

Can the executor sell the house before probate ends? Yes, in most cases - once letters are issued, executors generally have power to sell estate real estate, with proceeds distributed through the estate.

What about an inherited co-op or condo? Condos work like houses. Co-ops are shares, not real property - the estate transfers or sells them subject to board approval, which adds its own timeline.