Inheriting A Home Abroad Could Be Nothing More Than A Hassle

Inheriting a home in a beautiful, far-away location might sound like a dream come true for many. However, that is only looking at the surface level. The brutal reality is that inheriting a home abroad can quickly turn into a hassle, especially if you're not properly prepared for all of the legalities and expenses that can come with it. While having to pay a still-due mortgage could be difficult — there are also various hidden costs of inheriting a house that is paid off, no matter where it is located.

To start, your inherited property will likely be subject to both U.S. laws and the laws of the country it is located in, which can and do vary greatly. The first thing you'll need to do is make sure you can legally inherit the property. Many countries have civil laws about what is known as forced heirship. This dictates that at least a portion of an inherited property must pass to direct descendants, regardless of the deceased owners wishes. Other countries, like the United Arab Emirates, also have religious laws that limit who can and cannot receive an inheritance. 

Likewise, if the property in question was a second home, it will likely be subject to what's known as ancillary probate. This means you could be dealing with an additional instance of probate, both in the state where the deceased person maintained U.S. residence and the country in which the property is located. The good news is that the executor is usually tasked with handling this, but additional legal help may still be required for the foreign country process.

In the U.S., the threshold for paying taxes on inheritance is pretty high, with most (property or otherwise) not being considered taxable income. At the federal level, you'll only owe money if the amount is over $15 million, as of 2026. However, you will still need to check with your local state, county, or even city for additional taxes, but the good news is that many states don't impose estate taxes. However, depending on the country the inherited property is located, you could face a different story. In the U.K., for example, you would likely owe a 40% inheritance tax if the value exceeds £325,000 ($433,535 USD) but this figure can vary if you're related to the deceased. Meanwhile in France you may be taxed anywhere from 5% to 60% depending on your specific relationship to the deceased.

Following this initial inheritance tax, you'll also still wind up owing local property taxes each year for as long as you own the home. If you don't establish residency in the country the home is located, these taxes could wind up being steep (again, depending on the country) both due to you not qualifying for local tax exemptions and the fact that some countries have higher rates for non-residents. None of this even counts income tax — should you decide to rent the property out. While this can be an effective way of earning extra cash, you'll find yourself owing income tax in both the U.S. and abroad if you remain a U.S. citizen and/or resident while doing this.

You do have a few options for what to do if you inherit a home you don't want, starting with filing a disclaimer that renounces your pending ownership of the property. This can be especially handy if you're aware of the property needing significant repairs that you don't have the time or money for — or if you simply want to avoid the complications that come with a home abroad. With that said, different countries have different rules about being able to disclaim your inheritance. If you do accept the property, you'll have to wait to take any action until probate has fully concluded and ownership has officially been transferred to you. You should, if possible, visit the property in person and get it appraised before making any firm decisions about what to do next. 

Establishing residency, or even fully relocating, can be complex in many countries, requiring proof of income, general finances, or even health checks depending on where you are. You may instead try to sell or rent out the property, but there are likely local laws that make either process different than in the U.S. Regardless of your ultimate decision, it's important to get acquainted with all applicable foreign and domestic laws when inheriting an overseas property — and make sure you're doing everything by the book to avoid turning an already complicated scenario into a real problem.