Help with District Valuer querying probate value of property

RJF71

HI

i'm the executor of a will of a deceased family member (date of death 7 May 2016)

I completed all forms, including relevant IHT forms as the estate was over the IHT threshold, paid for a probate valuation of the deceased's house by a RICS Sureyor, was granted probate, paid IHT on the liquid assets of the estate and opted to pay in instalments for the remainder due on the property.

I was contacted by the District Valuer by phone in June 2018 as they had received instruction from HMRC to query the valuation. Several months and phone calls later they came to inspect the property in September 2018 and gave me their revised valuation late October 2018 which is £325,000 (£50k more than the Surveyor's valuation of £275k). This leaves the estate liable for more IHT.

i have to agree or dispute the valuation and have been unsure what to do.

The Valuer says they contacted the Surveyor to ask for their reasons for the valuation but have obviously chosen to disregard them. The District valuer (who by her own admission is not a building surveyor) said she had asked a colleague about costs to repair defects in the property (it is in poor condition) and had taken these into account. They had also used larger houses in a more desirable road as their basis for the valuation.

Whilst tidying up the paperwork for the estate in January i came across a letter from HMRC from October 2017 stating they would not be making any more queries about any of the assets (with the usual caveats about giving false information etc).

I spoke to the IHT helpline who said that i should raise it with the District Valuer but that they thought that if i'd had that sign off i should not have been contacted by the DV.

The District Valuer said they would have to contact HMRC and make enquiries.

I heard yesterday that HMRC still require the valuation from the DV and am now under pressure to agree to it or provide evidence as to why i disagree.

i haven't seen any evidence of the enquiry to the DV about the valuation nor of their response to the DV about their enquiry following that letter. Everything has come by email or phone call apart from the valuation from the DV.

Any advice appreciated - i don't know whether to just agree it or fight it, i don't know why they won't accept the RICS valuation, surely the Surveyor should be able to defend it ( he has been on sick leave from work so i haven't been able to speak to him).

Many thanks

Yorkshireman99

RJF71 wrote: »

HI

i'm the executor of a will of a deceased family member (date of death 7 May 2016)

I completed all forms, including relevant IHT forms as the estate was over the IHT threshold, paid for a probate valuation of the deceased's house by a RICS Sureyor, was granted probate, paid IHT on the liquid assets of the estate and opted to pay in instalments for the remainder due on the property.

I was contacted by the District Valuer by phone in June 2018 as they had received instruction from HMRC to query the valuation. Several months and phone calls later they came to inspect the property in September 2018 and gave me their revised valuation late October 2018 which is £325,000 (£50k more than the Surveyor's valuation of £275k). This leaves the estate liable for more IHT.

i have to agree or dispute the valuation and have been unsure what to do.

The Valuer says they contacted the Surveyor to ask for their reasons for the valuation but have obviously chosen to disregard them. The District valuer (who by her own admission is not a building surveyor) said she had asked a colleague about costs to repair defects in the property (it is in poor condition) and had taken these into account. They had also used larger houses in a more desirable road as their basis for the valuation.

Whilst tidying up the paperwork for the estate in January i came across a letter from HMRC from October 2017 stating they would not be making any more queries about any of the assets (with the usual caveats about giving false information etc).

I spoke to the IHT helpline who said that i should raise it with the District Valuer but that they thought that if i'd had that sign off i should not have been contacted by the DV.

The District Valuer said they would have to contact HMRC and make enquiries.

I heard yesterday that HMRC still require the valuation from the DV and am now under pressure to agree to it or provide evidence as to why i disagree.

i haven't seen any evidence of the enquiry to the DV about the valuation nor of their response to the DV about their enquiry following that letter. Everything has come by email or phone call apart from the valuation from the DV.

Any advice appreciated - i don't know whether to just agree it or fight it, i don't know why they won't accept the RICS valuation, surely the Surveyor should be able to defend it ( he has been on sick leave from work so i haven't been able to speak to him).

Many thanks

The only solution is to get your solicitor to negotiate with the DV. The DV staff should be qualified to the same level as the RICS staff.

RJF71

Thanks, are you recommending solicitor to do negotiation as that's the best way of getting a result? I haven't used a solicitor for probate as it was a straightforward estate.

getmore4less

20% is a significant difference from mid point to mid point.

Should always check any valuations against the local market data to see if it looks reasonable.


What other evidence do you have from the time?

Evidence of market movement can help as well.

if you want the solicitor to negotiate you need the evidence(it will cost more if you let them collect it)

The valuer should also provide an additional statement of why they think there is a difference.

RJF71

getmore4less wrote: »

20% is a significant difference from mid point to mid point.

Should always check any valuations against the local market data to see if it looks reasonable.


What other evidence do you have from the time?

Evidence of market movement can help as well.

if you want the solicitor to negotiate you need the evidence(it will cost more if you let them collect it)

The valuer should also provide an additional statement of why they think there is a difference.

Thank you.

I've got evidence of sold house prices locally. However the house is in a road where they are mostly unique and is probably the most underdeveloped/unrefurbished house in the road as well as the smallest. Zoopla can show me a 19.9% increase in the house values over the last 5 years or 0.36 over 12 months.

The District Valuer did not provide any evidence other than 3 values of house sales for bigger properties on bigger plots in better states of repair in a road in which all the houses have bigger gardens, better views etc. I think they have used a formula per SQ M of external area to calculate a land value and then applied it to the property in question.

Ganga

Has the house been sold? if so how much did it sell for,ie the valuation by the RICS surveyor or the valuation by HMRC.

RJF71

No the house has not been sold yet and at the time of the valuation by the DV there was no plan to sell

getmore4less

How much lower was the valuation than the other better properties that sold around that time.

Is there nothing comparative but not as good that you can use to set a low price.

What do you really think it was worth

The original valuer should be able to spin the differences.

When there are not good matching samples and properties are all different there is still a leeway for valuation between a positive spin and a negative one.

RJF71

Thanks

The DV is quoting properties that are 4 & 5 bedroom with large gardens, couple of them need modernisation but prices £410-475k.

our property needs new roof, new windows, central heating, wiring, bathrooms, proper kitchen (it is pretty much as it was I was small in the 70s, even the curtains). there is damp, there has been subsidence - sort of fixed in the 90s but the plastering was never decorated over. Surveyor valued it at £275k. it would need a lot of money spending and i'm not sure it's mortgageable for any potential purchasers in its current state. it has lots of potential and is in a great location. The houses on that road hardly ever come up for sale. there are two other dilapidated properties that were sold around that time - one a 6 bed Victorian terrace for £246k and one a 3 bed semi detached for £247k - I can provide those as evidence.

I would be happy to settle at a £300k valuation I guess but the original Valuer has not been very helpful in responding to me and the District Valuer seems to have ignored their reasons for the original valuation.

It's just difficult to know how to approach it to get a good compromise.

getmore4less

If they are your comparisons then you have a uphill battle £100k+ fixes a lot of stuff.

Not only do you have the base value variable you have the refurb variable.

Keep_pedalling

I think the only way to get a true value is to put it on the market. Is there any reason why you are hanging on to what seems a potential money pit?