Inheriting a House in New York: What to Do First
Inherited a home in NY? Secure and insure it, keep bills paid, start probate in Surrogate’s Court, use the stepped-up basis, and check the NY estate tax cliff.
9 min read · Updated
When you inherit a house in New York, your first jobs are to secure and insure the property and keep its bills paid, then find out how the home is passing: by joint ownership, a transfer-on-death deed, a trust, or through probate in Surrogate’s Court. You usually can’t sell or refinance until someone has legal authority, so the first 90 days are about protecting value, not making the big decision.
Below is a practical timeline, the tax rules that matter (the stepped-up basis and New York’s estate tax “cliff”), and how to think about keeping, renting or selling.
At a glance
- NY estate tax exclusion
- $7,350,000
- For deaths in 2026 ($7,160,000 in 2025)
- NY “cliff”
- 105% of the exclusion
- Above it, the whole taxable estate is taxed
- Estate tax due
- 9 months after death
- Form ET-706; extension on ET-133
- Your tax basis
- Value at date of death
- Not what the owner paid
- Small-estate shortcut
- Not for real estate
- SCPA 1301 covers personal property up to $50,000
The first 90 days
Week 1
Secure the home
Lock up, consider changing locks if many people had keys, photograph every room, and remove valuables and important papers (deeds, the will, insurance policies, tax bills). Don’t give away or sell belongings yet; they belong to the estate.Week 1–2
Call the insurer
Tell the homeowners insurance company about the death and ask whether coverage continues and what happens if the home is vacant. Some policies limit coverage for vacant homes, so get the answer in writing and add a vacancy policy if needed.Week 2
Keep utilities on and the mail coming
Keep heat on in winter to prevent burst pipes. Forward mail so you see tax, water and mortgage bills.Weeks 2–4
Find out how title passes
Pull the deed on ACRIS (NYC) or from the county clerk. Look for joint owners, a recorded transfer-on-death deed, or a deed into a trust. Find the original will.Month 1
Contact the mortgage servicer
Report the death and keep payments current from estate funds if possible. If it is a reverse mortgage, the loan is now due: call the servicer right away (see below).Months 1–3
Start probate or administration if needed
File in the Surrogate’s Court of the county where the person was domiciled (lived) at death. Once appointed, the executor or administrator can deal with the property.By month 3
Get a date-of-death appraisal
This sets your tax basis and the estate’s value for estate tax. It is far easier to get now than years later.
How the house is passing to you
| If the house was… | What happens | Court needed? |
|---|---|---|
| Owned jointly with survivorship (or by spouses as tenants by the entirety) | The survivor owns it automatically; ask a title company or lawyer what to record to clear the title | Usually no |
| Covered by a recorded transfer-on-death deed (RPL § 424) | Named beneficiaries take it at death, subject to any mortgage or lien | Usually no |
| Deeded to a living trust | The successor trustee follows the trust | Usually no |
| In the person’s name with a will | Executor named in the will must be appointed in probate | Yes: probate |
| In the person’s name with no will | An administrator is appointed; heirs set by EPTL § 4-1.1 | Yes: administration |
New York’s simplified small-estate process handles only personal property of $50,000 or less and does not apply to real property, so a house held in the person’s sole name generally needs full probate or administration. If there is no will, the intestacy law gives a surviving spouse $50,000 plus half of the rest when there are children, and the children the remainder.
Keep the costs paid
- Property taxes and water. Unpaid NYC property tax and water charges accrue interest and can lead to a lien. See how to read and pay your NYC property tax bill and the NYC tax lien sale. Exemptions tied to the late owner, such as a senior exemption, may not carry over to you.
- Mortgage. The debt doesn’t disappear at death. Keep paying while you decide.
- Insurance, heat and basic maintenance. A neglected or frozen house loses value fast.
- Tenants. If the home has tenants, keep honoring their leases and collect rent into an estate account; get legal advice before changing anything.
Taxes: the step-up and the NY estate tax cliff
Stepped-up basis
Under IRS rules, your basis in an inherited home is generally its fair market value on the date of death (or the alternate valuation date if the estate elects it), not what the owner paid decades ago. If a parent bought for $150,000 and the home was worth $900,000 at death, your basis starts at $900,000. Sell soon for about that price and there is little or no taxable gain. One exception: if you or your spouse gave the property to the person within a year before death, the basis is their old basis.
New York estate tax
The estate, not you, owes any estate tax. A New York resident’s estate must file Form ET-706 if the federal gross estate plus certain gifts is over the basic exclusion amount. Nonresidents with New York real estate are also covered if their estate is over the threshold. The return and payment are due nine months after death; Form ET-133 requests an extension, which generally can’t exceed six months.
| Year of death | Basic exclusion | Cliff (105%) |
|---|---|---|
| 2025 | $7,160,000 | $7,518,000 |
| 2026 | $7,350,000 | $7,717,500 |
Federal estate tax applies only above $15,000,000 for 2026 deaths. Later, if you sell, use the capital gains guide and the capital gains calculator with your stepped-up basis.
If there is a reverse mortgage
The loan becomes due when the last borrower dies. The CFPB says heirs can keep the home by paying the full balance, or sell it; if the balance is more than the home is worth, paying 95% of the appraised value settles it, and FHA insurance covers the rest. Heirs generally have 30 days after the due-and-payable notice, extendable up to six months, so call the servicer immediately. See reverse mortgage basics.
Keep, rent or sell?
| Move in | Rent it out | Sell | |
|---|---|---|---|
| Main benefit | A home, possibly mortgage-free | Income and future appreciation | Cash, split easily among heirs |
| Co-heirs must agree or be bought out | |||
| You take on landlord duties | |||
| Step-up limits capital gains tax | If sold later | Yes, but depreciation recapture later | Yes, if sold near date-of-death value |
| Co-op board approval needed | Usually | Sublet rules apply | For the buyer |
Run the numbers before you decide:
- Rent out or sell calculator
- Home sale proceeds calculator
- NYC property tax estimator
- Selling an inherited home in New York
If several siblings inherit together, agree in writing who pays carrying costs and how they are repaid at sale. When heirs can’t agree, a lawyer can explain buyout and partition options.
When to get a lawyer
- There is no will, the will is contested, or you can’t find the original.
- The estate may be near the New York estate tax threshold.
- There is a reverse mortgage, unpaid mortgage, liens or tax arrears.
- The home is a co-op, has tenants, or co-heirs disagree.
General information, not legal or tax advice. Estate rules depend on the documents and the court.
Re-verified 2026-10-12. tax.ny.gov: BEA $7,160,000 (2025 deaths) and $7,350,000 (2026 deaths); residents file if federal gross estate plus includible gifts exceeds BEA; nonresidents with NY real or tangible property file on the same test; ET-706 and payment due in 9 months; ET-133 extension generally up to 6 months. ET-706-I (9/25), for deaths on/after 1/1/2025: credit worksheet between $7,160,000 and $7,518,000 of taxable estate, zero credit above $7,518,000. The 2026 105% figure ($7,717,500) is Roofy arithmetic on the published BEA. IRS: $15,000,000 filing threshold for 2026 deaths. Pub 551: date-of-death or alternate-valuation basis; 1-year gift-back exception. SCPA 1301/1302: $50,000 personal-property small estate, not for real property. SCPA 205: venue in county of domicile. EPTL 4-1.1 intestate shares. RPL 424 and EPTL 6-2.2 transfer rules. CFPB reverse mortgage heir rules (95% of appraisal, 30 days, up to 6 months). Example basis figures are illustrative. Fixed: removed unverified paperwork and tenant-lease claims, clarified the cliff applies to the taxable estate, added venue source and extension limit. Practical steps are general guidance. Not legal or tax advice.
Sources
- Estate tax · NYS Department of Taxation and Finance (accessed October 12, 2026)
- Instructions for Form ET-706, New York State Estate Tax Return · NYS Department of Taxation and Finance (accessed October 12, 2026)
- Estate Tax (federal filing thresholds) · IRS (accessed October 12, 2026)
- Publication 551, Basis of Assets · IRS (accessed October 12, 2026)
- SCPA § 1301, Small estates · New York State Senate (accessed October 12, 2026)
- SCPA § 205, Venue for domiciliary estates · New York State Senate (accessed October 12, 2026)
- EPTL § 4-1.1, Descent and distribution of a decedent’s estate · New York State Senate (accessed October 12, 2026)
- Real Property Law § 424, Transfer on death deed · New York State Senate (accessed October 12, 2026)
- EPTL § 6-2.2, When estate is in common, in joint tenancy or by the entirety · New York State Senate (accessed October 12, 2026)
- Will my children be able to keep my home after I die if I have a reverse mortgage loan? · Consumer Financial Protection Bureau (accessed October 12, 2026)
General information, not legal, tax or financial advice. Rules change; confirm with the agency or a professional before you act.