Selling an inherited house in Maryland: probate, taxes and settlement

When someone dies owning a house in Maryland, the people left to sell it are usually doing it for the first time, often while grieving and sometimes from another state. The sale itself works much like any other. What is different is the order of steps: who has the power to sign, when the estate can pay the heirs, which taxes apply, and what the title search turns up in a house that has not changed hands in decades. This guide walks through each one. It is general information, not legal advice for a particular estate, and it is part of our guides to deed transfers and estates.

First, who can sign the deed

In Maryland, property that the person who died owned in their own name passes at death to the personal representative of the estate, who holds the legal title while the estate is administered. Until a personal representative is appointed, nobody can give a buyer a good deed, however clear the will is and however much the family agrees.

The estate is opened with the Register of Wills, usually in the county where the person who died lived, which issues letters of administration naming the personal representative. That is not always the county where the house is: a Baltimore County resident’s estate can own a house on the Eastern Shore. Expect to provide a certified copy of the letters for the settlement, so ask the Register of Wills for one as settlement approaches.

Some situations change this:

• The house was owned jointly with a right of survivorship, as married couples often own their home. It normally passes to the surviving owner without probate, and the survivor sells it. The title search shows how the house was held, and you should expect to provide a copy of the deceased owner’s death certificate.
• The owner recorded a transfer-on-death deed. Under Maryland’s law on these deeds, in effect since October 1, 2026, the named beneficiaries receive the house at the owner’s death, and they sell it themselves. Our guide to transferring a deed after a death explains each of these routes.
• The estate is small. Maryland has a shorter procedure for small estates. Property counts at its market value less recorded debts secured by it, such as a mortgage, and the value limits are low compared with many Maryland home prices. An estate that includes a house often does not qualify unless a large mortgage is still owed. The Register of Wills can tell you which procedure applies.

How probate and the sale fit together

Maryland gives a personal representative the power to sell estate property without asking the court for approval, unless the will or a court order limits it. So a sale does not usually have to wait for the estate to close. A typical order of events looks like this:

1. Open the estate and get the letters of administration.
2. Secure the house. Change the locks and keep the utilities and insurance in place. Tell the insurer the house is empty, because some policies limit coverage on a vacant house.
3. Price and list it, or sell directly to a buyer you already know. Our for sale by owner support covers estates selling without an agent.
4. Sign the contract as personal representative. Depending on the will and the estate, the heirs may also be asked to sign.
5. Search and clear the title, as explained below.
6. Settle and record. The net proceeds go to the estate’s account, not to the heirs directly.
7. Pay debts and taxes, then distribute. Creditors have a limited time to bring claims against the estate, counted from the date of death or from a notice the personal representative sends them, whichever ends first. Talk to the estate’s lawyer before paying the heirs while that window is still open.

Maryland inheritance tax on the house

Maryland charges inheritance tax according to who receives the property, not how much the estate is worth. A spouse, parent or stepparent, grandparent, brother or sister, child or stepchild, grandchild or other descendant of a child, or the spouse of a child or of a child’s descendant pays nothing. So does a child’s surviving spouse who has not remarried, and a registered domestic partner when the death was on or after October 1, 2023. Most other heirs, such as nieces, nephews, cousins and friends, pay 10% of the value of what they receive. Property worth $1,000 or less passing to any one person is exempt, and so is property distributed from a small estate.

For property that goes through the estate, the tax is based on the value at the time of distribution. It is paid to the Register of Wills when the personal representative files the account that shows the distribution. Ask the estate’s lawyer how it will be charged against each heir’s share.

Inheritance tax is not the same as income tax on the sale. For federal income tax, an heir’s starting cost (basis) for an inherited house is generally its fair market value on the date of death, which often makes the taxable gain small. That is a question for the estate’s accountant, but keep any appraisal or broker’s opinion of value from around the date of death.

Keeping the tax credits while the estate is open

The State Department of Assessments and Taxation (SDAT) says that under House Bill 1148, a 2026 state law, an heir can keep or apply for the Homestead and Homeowners’ property tax credits for up to three tax years while going through probate. SDAT asks the heir to file an Affidavit for Continued Tax Credits for Heirs before the deed is put in their name. Its guidance for heirs also lists a copy of the will, the death certificate, proof of the family relationship and the names and addresses of all the heirs as papers to have ready. Check with SDAT early on how the rule applies to your family.

The Homestead credit limits how fast the taxed assessment can rise each year, and each county sets its own cap for county tax. Keeping the credit can matter if the family holds the house for a while before it sells. Our Homestead tax credit guide explains how the credit works.

The credits do not carry over to a buyer. The buyer applies for the Homestead credit in their own name, and Maryland requires the settlement agent to give the buyer a copy of the application at settlement.

Settlement costs on an estate sale

The government taxes on an estate sale are the same as on any other sale at the same price in the same county. The cost box at the top of this page compares the county rates and estimates the buyer’s and seller’s shares for any price you type. If the contract says nothing, Maryland law splits them equally between buyer and seller, with an exception for some sales to first-time Maryland buyers.

Three estate-specific points:

• A deed to the heirs carries no transfer or recordation tax when the heirs pay nothing for it. If the family decides to keep the house, or one heir takes it as their share, the personal representative’s deed to them is not taxed. If one heir pays the others for their shares, that payment can change the answer, so ask before the deal is agreed.
• Unpaid property taxes. Normally a deed cannot be recorded until the property taxes due are paid. On a sale they are usually paid from the proceeds at settlement. When the house instead goes from the estate to an heir, Maryland law lets the deed be recorded if the heir enters into a payment plan for the taxes with the county, the town or the State Tax Sale Ombudsman.
• Sellers outside Maryland. Unless an exemption applies, Maryland requires tax to be withheld at settlement from the net proceeds paid to a nonresident seller: 8.75% for an individual and 8.25% for an entity. How this applies when an estate is the seller depends on the facts, so tell us early if the person who died, the personal representative or any heir lived outside Maryland. Our nonresident withholding guide explains the rule.

The estate’s side of the settlement statement usually also carries the payoff of any mortgage or reverse mortgage, the agreed commission, the property tax adjustment for the year, and any county charges that come due on sale. Proceeds can be sent to the estate’s account by wire. We do email wire instructions, so before anyone sends a wire, call our office at (410) 768-2300, the number on this website, not a number from an email, and confirm the instructions. Our wire fraud warning explains more.

Title issues common in inherited homes

A house that has been in one family for decades tends to raise the same handful of questions:

• An earlier death. If the deed still names a parent or spouse who died years ago, we need that death certificate too, and sometimes that earlier estate has to be dealt with first.
• Old mortgages and liens. Loans paid off long ago sometimes have no recorded release. Judgments or unpaid bills in the owner’s name can also show up. We work to trace and clear them before settlement.
• County charges the owner put off. Some counties let older or disabled owners defer certain charges on the home they live in, and the deferred amount can come due when the house is sold. The title work shows whether one applies; the Anne Arundel section below gives an example.
• Changes nobody wrote down. A long-time owner may have added a fence, a shed or a pier, or used a neighbor’s driveway for years, and the heirs often cannot say what was agreed. A survey shows where the lines really are.
• Wells and septic. If the house has a private well or septic system, the family may have no records of it. Agree in the contract who arranges any inspections.
• No seller disclosure form. A personal representative selling in the course of administering the estate is exempt from Maryland’s property condition disclosure and disclaimer law. Buyers should expect to rely on their own inspection.

An owner’s title policy is optional in Maryland, and its premium is paid once, at settlement. It can protect the buyer against covered title problems that a search did not find, such as a claim from an heir no one knew about, subject to the policy’s terms and exceptions. Our title insurance page explains what it covers.

Recording the personal representative’s deed

The deed to the buyer comes from the personal representative and is signed in that role. After settlement, the county where the house is must endorse the deed and collect the county taxes due before it can be recorded, and it is then recorded with the clerk of the circuit court for that county. The deed is recorded where the house is, even if the estate was opened in another county or the heirs live elsewhere. We handle the endorsement and recording.

Selling an inherited house in Anne Arundel County

Our office is in Glen Burnie, and many of the estate sales we settle are for Anne Arundel County homes. A few local points:

• Where the deed is recorded. After Anne Arundel County’s Office of Finance endorses the deed and collects the county taxes, it is recorded with the Clerk of the Circuit Court for Anne Arundel County, Land Records Department in Annapolis. Our Anne Arundel County closing costs guide shows the county’s transfer and recordation taxes.
• Prices and the small estate limits. The county’s median sale price is $509,990, so most estates that include a house here do not qualify for the small estate procedure.
• The Homestead cap. Anne Arundel County caps the yearly increase in the taxed assessment for county tax at 2%, including the county share of bills inside Annapolis.
• Deferred water and sewer charges. Anne Arundel County has offered a program that lets some older or disabled owners defer certain public water and sewer connection charges and front foot benefit assessments on the home they live in. Under the program’s terms, the deferred amount stays a lien on the house and the full balance is due when the house is sold or its title is transferred. Families are often unaware of it until it shows up in the title work.

How Maryland First Title helps

Maryland First Title has handled settlements across Maryland since 1994, from our office at 306 Crain Hwy N in Glen Burnie. Our attorney settlement agents search the title, work to clear what the search finds, prepare the deed and the figures, and conduct the settlement. Personal representatives and heirs can meet us in Glen Burnie, with weekend and after-hours appointments available. We coordinate the sale with the personal representative and the estate’s lawyer, if there is one.

For a sale to an outside buyer, see residential settlements and our seller’s checklist.