Selling inherited foreign property from the US: Complete guide

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining business advice from a Certified Public Accountant (CPA) or tax lawyer.

Inheriting property abroad can often feel overwhelming, especially when you're ready to sell.

You're dealing with an unfamiliar real estate system, potentially in a language you don't speak, and you're also likely wondering how this affects your US taxes.

Overall, selling an inherited foreign property as an American requires you to follow the laws in the country where the property is located and meet your obligations to the IRS.

Here's everything you need to know to handle the foreign property sale legally and smoothly.

We'll also introduce Wise — your international money transfer alternative. Use Wise to send stress-free transfers to over 140 countries - all at the standard mid-market exchange rate.

Learn more 🔎

Table of contents
How do I determine how much my property is worth? What to consider when selling a property abroad Documents required to sell property abroad How to sell inherited property abroad: step by step How long does it take to sell a foreign property? Costs of selling property abroad What is the tax for selling inherited property overseas?

How do I determine how much my property is worth?

The first step to selling your overseas property is figuring out how much it's worth.

You can do this by getting an official property appraisal in the country where your inherited property is located. Usually, you should look for a certified local appraiser who understands the market and can provide documentation that satisfies local requirements.

Most countries require a professional valuation before you can sell.

For US tax purposes, inherited property receives what's called a "stepped-up basis."

Because of the stepped-up basis, your starting value for calculating capital gains is the property's Fair Market Value (FMV) on the date the original owner died, and **not **what they originally paid for it.

This will often reduce your US tax burden when you sell.

What to consider when selling a property abroad

You'll have to navigate two different legal systems at once when selling an inherited property abroad — both the country where the property is located and the US.

Here's what this looks like in practice:

• You may need to pay capital gains tax in both the country where the property is located and the US
• Foreign real estate transactions often require a local attorney or notary to handle the legal paperwork
• Some countries have inheritance taxes or transfer fees that apply when selling inherited property
• Currency exchange rates will affect how much money you receive in USD
• The timeline for selling your property largely depends on the local country, with some places taking months longer than typical US transactions

You might need to travel to the country in person to sign documents or complete the sale.

However, if you can't travel from the US, in some countries, it's possible to sign a power of attorney and have your lawyer or trusted family member handle the sale remotely.

Documents required to sell property abroad

The documents you need for your sale largely depend on the country where your property is located.

Common documents include:
Death certificate of the original owner Proof of inheritance, such as a will or court order establishing your ownership Property deed or title Tax clearance proving that all property taxes are paid Identification documents like your passport

Your real estate agent or lawyer should be able to walk you through more precise requirements.

Some countries will require more documents, such as zoning certificates from local authorities or utility documents to show that there are no outstanding bills.

Your buyer's lawyer will also likely run independent checks to verify that the title is clean and there are no debts, but you usually don't need to provide any extra documents for them to do that.

How to sell inherited property abroad: step by step

---

1. Establish legal ownership

Before you can sell, you need to officially transfer the property into your name.

This process varies by country but typically involves registering the inheritance with local authorities and updating the property title.

You'll need the original owner's death certificate, proof of your inheritance rights, and possibly a court order or notarized will.

2. Get the property appraised

Hire a certified local appraiser to determine the property's current market value. This appraisal both helps you set a realistic selling price and establishes the Fair Market Value for US tax purposes.

3. Hire a local real estate attorney

Find an attorney who specializes in real estate transactions, and they'll guide you through local requirements, review contracts, handle negotiations, and make sure all paperwork is filed correctly.

Lawyers charge fees, but in most countries, getting their help isn't optional. It's often legally required to have an attorney involved in your property sale.

4. Clear any outstanding debts or liens

Check for unpaid property taxes, utility bills, or mortgages attached to the property. You'll need to settle these before the sale can proceed.

Your attorney can help you get tax clearance certificates and other proof that all obligations are met.

5. List the property for sale

You'll work with a local real estate agent to list and market your property, especially if you're not there physically.

Alternatively, you might also sell directly to a buyer if you already have one lined up.

6. Negotiate and accept an offer

You'll likely get multiple offers on your property, and you should review them with your attorney and real estate agent.

Once you accept an offer, you'll typically sign a preliminary contract, and the buyer will put down a deposit.

7. Complete the legal paperwork

Your attorney will prepare all required documents for the sale, including the final purchase agreement and transfer of title.

Depending on the country, you may need to appear in person at a notary's office or government registry to sign. If you can't travel, you can often grant power of attorney to your lawyer, but ultimately this depends on the country.

8. Receive payment and transfer ownership

The buyer's funds are typically held in escrow until all conditions are met.

Once everything is finalized, you'll receive payment (minus any local taxes, fees, and commissions), and the property title will transfer to the new owner.

Make sure you understand how and when you'll receive the funds, especially if they need to be converted to USD.

9. Report the sale on your US taxes

File the sale on your US tax return for the year it occurred.

You'll report any capital gains based on the difference between the stepped-up basis (FMV at date of death) and your sale price.

There are also informational reporting requirements that you may need to comply with, such as Form 3520, FATCA, and FBAR — more on this later.

Send high amount, low cost international transfers with Wise

A smart option if you’re sending money overseas: meet Wise.

With Wise, you can send up to 1,000,000 USD per wire transaction to 140+ countries, with the mid-market exchange rate and low, transparent fees.

Over 70% of Wise payments arrive instantly* — and all Wise transfers are deposited directly into your recipient's bank account for convenience.

No ongoing fees, no hidden charges and no hassle — just fast, transparent international transfers that can beat the banks.

🚀Get started with high amount transfers

See how Wise compares with international bank transfers in our full guide

*Transaction speed claimed depends on funds availability, approval by Wise’s proprietary verification system and systems availability of our partners’ banking system, and may not be available for all transactions.

How long does it take to sell a foreign property?

No fixed timeline applies to all properties and countries.

Some countries have straightforward processes that take just a few months. In others, you may have to deal with lengthy probate procedures that can stretch over a year or more.

For example, probate in France typically takes around 6 months from start to finish.¹

In Mexico, if the deceased didn't leave a will, just figuring out the legal heirs and dividing the property among them can take over a year.²

You should also factor in additional time for getting the property appraised and listed and finding a buyer.

Costs of selling property abroad

You'll encounter different expenses in different countries, but common ones include:

• Legal fees for attorneys in both the foreign country and potentially in the US
• Property appraisal costs to establish Fair Market Value
• Real estate agent commissions
• Notary fees and government registration charges
• Translation and document authentication costs
• Currency conversion fees when transferring proceeds to USD
• Capital gains taxes in the country where the property is located
• US capital gains tax on the sale

Your US tax obligations will likely be pretty manageable thanks to stepped-up basis rules.

Since your basis equals the property's value at the date of death, you'll only owe US capital gains tax on appreciation that occurred after you inherited it.

If you sell relatively soon after inheriting, you might owe little or nothing to the IRS.

However, not all countries follow stepped-up basis rules. Many countries tax inherited property differently or impose inheritance taxes when you sell.

Your local tax obligations in the foreign country may be much higher than what you owe in the US, so research the appropriate rules for your property's location.

Need to send a large amount? With Wise, you can send up to 1,000,000 USD per wire transfer to 140+ countries — and we automatically apply a discount when you send over 25,000 USD (or equivalent)*.

🚀Send high-amount transfers with Wise

*For more information, please visit https://wise.com/us/large-amounts/.

What is the tax for selling inherited property overseas?

You have tax obligations in two places: the country where the property is located and the US.

Local country taxes

Every country has its own rules for taxing property sales and inheritances. For example, some countries charge inheritance or estate taxes when you receive the property.

Even if the local country doesn't tax inherited assets, you'll most likely have to pay capital gains tax when you sell the property. The rates vary widely, and you may consider working with a local tax advisor or lawyer to understand your obligations.

US capital gains tax

In the US, you'll owe capital gains tax on any profit from the sale.

Your profit is calculated as the sale price minus your stepped-up basis (the Fair Market Value on the date of death) and minus any selling expenses.

If you owned the property for more than 1 year after inheriting it, you'll pay long-term capital gains rates, which are typically 0%, 15%, or 20% depending on your income level.³

Short-term capital gains are taxed at the same rate as your ordinary income.³

💡 Learn more about receiving inheritance money from overseas in our full guide.

Informational reporting requirements

The IRS may also require you to file informational reports when you inherit or sell foreign property:

• Form 3520 must be filed if you receive a foreign inheritance worth more than 100,000 USD in a tax year from a foreign estate or foreign person⁴

• FBAR (FinCEN Form 114) is required if the total value of your foreign financial accounts exceeds 10,000 USD at any point during the year, including proceeds from a property sale held in a foreign bank⁴

• FATCA (Form 8938) requires reporting specified foreign financial assets above certain thresholds, which depend on your filing status and whether you live in the US or abroad

These are informational reports, not tax payments. However, not filing them on time or at all can trigger serious financial penalties and even criminal charges if the US government thinks that you're intentionally hiding foreign assets from them.

Do I have to report the sale of inherited foreign property to the IRS?

Yes, you must report the sale of your inherited foreign property on your US tax return.

The US taxes its citizens and residents on worldwide income, which means that any money you make from selling property abroad counts as taxable income, just like domestic property sales.

You'll need to report the transaction on Schedule D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets).⁵

However, you may end up owing no or minimal capital gains tax on your sale because of the stepped-up basis. Reporting doesn't necessarily mean you have to pay taxes.

How can I avoid capital gains tax on foreign property sales?

It's not possible to completely avoid capital gains tax when you sell a foreign property, but you can often minimize what you owe, especially to the US government.

The stepped-up basis rule already gives you a lot of tax relief.

Since your basis equals the property's Fair Market Value at the date of death, you only pay tax on appreciation that occurs after you inherit. If you sell soon after inheriting, your taxable gain may be minimal or even zero.

Additionally, if you paid capital gains tax to the foreign country where the property is located, you can often claim a Foreign Tax Credit on your US tax return. This credit prevents double taxation by offsetting your US tax liability with the foreign taxes you paid on the same income.

You can't get money back, but the credit can reduce your US capital gains tax to zero if your foreign tax payment was high enough.

If you worry that you'll owe too much in taxes, it's a good idea to consult with a tax professional to figure out a strategy.

---

You need to understand both the local requirements and your US obligations to successfully sell an inherited foreign property and pay the least possible amount in taxes.

Working with qualified professionals in both countries, such as attorneys, appraisers, and tax advisors, helps you complete everything correctly.

However, when you have assets abroad or split your time between countries, you'll often need to send money internationally.

Banks charge high fees and add exchange rate markups that can cost you thousands of dollars, especially on large amounts like property sale proceeds.

To simplify international money transfers and save on costs, use Wise.

With Wise, you can send secure and trackable large amount transfers to 140+ countries worldwide with transparent fees and the fair mid-market exchange rate.

Have a look at the main benefits for using Wise to send large transfers:

• Dedicated support for large transfers
• Fast and easy setup with no physical paperwork
• Upfront, transparent fees
• Fully trackable transfers
• Fast transfer times
• Two-factor authentication and real-time notifications

🚀 Get started with Wise

Sources

1. Notaires - French probate
2. MexLaw - Who Will Inherit Your Property in Mexico?
3. TurboTax - A Guide to the Capital Gains Tax Rate
4. 1040Abroad - Foreign Inheritance Tax
5. Taxes for Expats - Capital gains tax on foreign property

Sources checked 12/17/2025