Selling an Inherited House in Maryland — Probate, Taxes and Options

You can sell an inherited house in Maryland once a personal representative is appointed by the Orphans' Court or, for estates under $50,000 (personal property) or $100,000 (with a surviving spouse), through a simplified small estate affidavit that takes just 20–30 days. Maryland charges 0% inheritance tax to direct family members and 10% to non-direct beneficiaries, and the stepped-up cost basis eliminates capital gains tax on appreciation during the decedent's lifetime. This guide walks you through every step.

Understanding Maryland Probate Through Orphans' Court

Maryland is one of only a few states that still uses the Orphans' Court system for probate matters. The Orphans' Court sits in every county and Baltimore City and has exclusive jurisdiction over the administration of decedents' estates, including the authority to appoint personal representatives (called executors if named in a will, administrators if not).

When someone dies owning real property in Maryland, that property cannot be sold until one of the following occurs:

• The Orphans' Court appoints a personal representative and grants authority to sell
• The estate qualifies for the small estate process (modified administration)
• The property was held in joint tenancy with right of survivorship (passes automatically)
• The property was held in a living trust (avoids probate entirely)

The Register of Wills in the county where the decedent lived is your first point of contact. They accept the petition for probate, collect the filing fee ($5 per $1,000 of estate value, minimum $50), and forward the case to the Orphans' Court for appointment of the personal representative.

Three Paths to Settle a Maryland Estate

Maryland offers three distinct probate paths depending on the size and complexity of the estate:

Factor	Regular Administration (Probate)	Modified Administration	Small Estate Affidavit
Estate Value Threshold	No limit	No limit (all heirs must consent)	Personal property ≤ $50,000 ($100,000 with surviving spouse)
Real Property Included	Yes	Yes	No — real property disqualifies
Timeline	6–12 months	3–6 months (12-month max)	20–30 days
Court Oversight	Full — accountings required	Limited — final report only	Minimal
Personal Representative Required	Yes	Yes	No — any heir can file
Creditor Notice Period	6 months	6 months	None (but creditors can still claim)
Bond Required	Usually yes (waivable by will)	Yes (unless waived)	No
Best For	Large, complex or contested estates	Cooperative heirs wanting faster process	Small personal-property-only estates

Important note: Because the small estate affidavit process excludes real property, inherited homes almost always require either regular or modified administration through the Orphans' Court. The only exceptions are properties held in joint tenancy, tenancy by the entirety (married couples), or a revocable living trust.

The Personal Representative: Role and Responsibilities

The personal representative (PR) is the only person legally authorized to sell inherited real property in Maryland. Their duties include:

1. Petition for appointment: File with the Register of Wills (filing fee: $5 per $1,000 of estate value)
2. Publish notice to creditors: Run in a local newspaper for 3 consecutive weeks
3. Inventory assets: File an inventory within 3 months of appointment
4. Pay debts and taxes: Estate debts, final income tax return, estate tax (if applicable), inheritance tax
5. Sell property if authorized: The will may grant sale authority; otherwise, court approval is needed
6. Distribute assets: After debts are paid and the 6-month creditor period expires
7. File accountings: First accounting due within 12 months; final accounting when estate closes

If the will specifically grants the personal representative the power to sell real property, they can list or sell the house without additional court approval. If the will is silent or there is no will (intestate), the PR must petition the Orphans' Court for authority to sell, which adds 30–60 days to the timeline.

Maryland Inheritance Tax: What You Owe

Maryland is one of only six states that imposes an inheritance tax, and one of only two (along with New Jersey) that has both an inheritance tax and an estate tax. The rates depend on your relationship to the decedent:

• 0% tax — Direct family: Surviving spouse, children, grandchildren, parents, grandparents, siblings, stepchildren, stepparents, and sons/daughters-in-law
• 10% tax — All others: Nieces, nephews, friends, unmarried partners, cousins and any non-direct beneficiary

The inheritance tax is calculated on the fair market value of the inherited property at the date of death. For a $250,000 house inherited by a nephew, the inheritance tax would be $25,000 — a significant cost that must be paid before the estate can be closed.

Maryland also imposes a separate estate tax on estates exceeding $5 million (Maryland's exemption threshold as of 2025). The estate tax rate ranges from 0.8% to 16% on amounts above the threshold. Most inherited homes in Maryland fall well below this level and are only subject to the inheritance tax.

Stepped-Up Cost Basis and Capital Gains

One of the most valuable tax benefits of inherited property is the stepped-up cost basis. When you inherit a home, your cost basis for capital gains purposes is the fair market value on the date of the decedent's death — not what they originally paid for it.

Example: Your parent bought a Baltimore row home in 1985 for $45,000. At their death in 2026, it is worth $195,000. Your stepped-up basis is $195,000. If you sell it for $200,000, your taxable capital gain is only $5,000 — not $155,000.

This makes selling soon after inheritance especially advantageous from a tax perspective. The longer you hold the property, the more it may appreciate above the stepped-up basis, creating a larger taxable gain. In Maryland, state capital gains are taxed at your ordinary income tax rate (up to 5.75%) plus local income tax (up to 3.2%), in addition to federal capital gains tax (0%, 15% or 20% depending on income).

Carrying Costs During Probate

While the estate winds through Orphans' Court over 6–12 months, someone must pay the carrying costs on the inherited property. These costs add up quickly and eat into the inheritance value:

• Mortgage payments: If the decedent had a mortgage, payments must continue or the lender will begin foreclosure (lenders typically allow 3–6 months of grace before accelerating)
• Property taxes: Maryland property taxes continue accruing — $1,000–$2,750+ per year depending on county and assessed value
• Homeowner's insurance: Standard policies void after 30–60 days of vacancy; vacant home insurance costs $1,500–$3,000+ per year
• Utilities: Minimum service ($100–$200/month) needed to prevent frozen pipes, maintain sump pumps
• Maintenance: Lawn care, winterization, pest control — neglected properties in Baltimore City can receive code violations of $900+ per day
• HOA dues: Continue accruing regardless of occupancy

On a typical inherited property in Maryland, carrying costs run $1,500–$3,000 per month. Over a 9-month probate, that is $13,500–$27,000 in expenses — money that comes directly out of the estate or the heirs' pockets.

Options for Selling an Inherited House

Once the personal representative has authority to sell, heirs generally have three options:

1. List with a real estate agent: Best for move-in-ready homes in desirable areas. Expect 60–90 days on market plus 5–6% commission. Total timeline from death to close: 9–15 months.
2. Sell to a cash buyer: Best for as-is properties, out-of-state heirs, or homes needing major repairs. Closes in 7–14 days after PR appointment. No commissions, no repairs, no showings. Total timeline from death to close: 6–8 months (probate + 7-day closing).
3. Sell FSBO (For Sale by Owner): Saves on listing agent commission but requires the PR to manage showings, negotiations and paperwork. Typically takes 90–120+ days after listing.

For inherited properties in poor condition — and many inherited homes have deferred maintenance after years of aging-in-place — a cash sale is often the best financial decision when you factor in eliminated carrying costs, commissions and repair expenses.

Selling During Probate vs. After

Maryland law allows the personal representative to sell inherited property during the probate process — you do not need to wait until probate is finalized. In fact, selling during probate is often preferable because:

• It generates cash to pay estate debts, taxes and administrative costs
• It stops the accumulation of carrying costs
• It simplifies the final estate accounting
• It allows the PR to distribute cash (easier to divide than real property)

The only requirement is that the sale must be in the best interest of the estate. If multiple heirs disagree about whether to sell, the Orphans' Court can intervene and order a sale if it determines that selling is necessary to pay debts or is otherwise in the estate's best interest.

Get a Cash Offer on Your Inherited Maryland Property

Dealing with an inherited property during an already difficult time should not be a burden. Maryland Property Buyers works directly with personal representatives and estate attorneys to purchase inherited homes quickly and fairly. We buy houses in any condition — occupied, vacant, damaged or clean. We close in as few as 7 days after the PR has authority, pay all closing costs, and handle the title work. Request your free, no-obligation cash offer or call us at (443) 951-3600. We will walk you through the process step by step, free of charge. Learn more about our team.