How to prepare yourself for selling the family house

How to prepare yourself for selling the family house

Sometimes you have to decide to move on, but it may not be easy if strong emotions are attached to the conclusion. The decision to sell your family house is one example where intense feelings are involved, and the house’s disposal process can be challenging. You may prepare yourself for a physical disconnect, but it will take more than a while to emotionally let go of the home. We will discuss how you can prepare yourself for selling the family house. We understand that to bid farewell to a place where you/your elders grew up in is more bitter than sweet. And, to move on with the memories is often intimidating.

Whether the family has decided to move on to another location or cannot take care of it or any other reason, it is unusual to see the home in strangers’ hands. Therefore, you must demonstrate significant resolve to take this step. Once you have made up your mind, let your emotions settle down as you begin the process.

Grieve to be able to overcome

‘Take a deep breath, relax and let go’ – whatever will happen will happen for good. Although this does not make the process any less painful, it allows you to appreciate the circumstances. You are letting go of a house, but remember that no one can take away those fond memories from you. Share your feelings with the family members; they will possibly go through the same melancholy, just not expressing it.

Do talk about your emotions; the most important thing here is to accept your feelings and let them flow. Appreciate why you chose this action despite those beautiful memories and never get under the burden of guilt. Always say goodbye to the house by walking through each room. Reflect upon the times you spent, take pictures, take a piece of furniture, plant or painting with you. A house is not brick and mortar structure; it is memories and emotions so be kind to yourself, make peace with the outcome and look forward to what lies ahead.

As you prepare to sell the family house, determining the sale value can be a journey

In rarest of circumstances will you feel that the price offered is justified, especially as emotions flare-up. Value of childhood memories, times you have spent, friends you made, mischiefs you did, plants you grew is immeasurable. It will almost not allow you to accept the reality.

Remember that the beauty lies in the person’s eyes, and prospective buyer is not looking at the house with the same lens as you are. So, never take it personally if the quote you obtain does not encapsulate all your emotions’ real value. Continue to engage with prospective buyers and discover the actual value of your house. Be ready to hear comments like room size are small, or living room is not elegant, the store is clumsy, etc. even though you always thought the home was perfect all this while. Do expect negotiations to happen, but there will be a price at which you will feel comfortable once you work with your emotions.

Tax liability may arise when you sell the family house

The culmination of the above process is a sale transaction. The gain from the sale of a house is taxable in the seller’s hands as capital gains. The holding period decides tax liability – if the property holding period is 24 months or more, tax on gains of sale is long-term capital gains (LTCG). For a shorter holding period, the profit from a house property sale is subject to short-term capital gains (STCG) tax.

Long-term capital gains tax

For calculating the LTCG tax, the first step is to determine the indexed cost of acquisition. Any significant house improvement or addition to the property is also eligible for indexation benefits from the respective year. The Income Tax Act specifies the index values for each year. The indexed cost of acquisition is derived by dividing the cost of ownership by the year of the purchase’s index value and multiplying by the year of sale’s index value. In case the property is acquired before April 1, 2001, there is an option to either consider the actual cost of acquisition or the property’s market value on April 1, 2001.

You can claim exemption from the capital gains in three ways – (1) purchase a new house within the stipulated timeframe (one year before the sale or two years after the date of sale), (2) construct a home within three years of the sale or (3) invest the gains in capital gains bonds (capped to Rs 50 Lacs). As per the current regulations, LTCG is subject to 20% tax + cess while STCG is subject to taxes as per the tax slab applicable to the assessee.

One crucial point to note is that inheritance is not taxable in India, and tax liability will only arise on the house’s sale. In case of an inherited property, the holding period’s calculation starts from the original owner’s purchase/ownership date.

There is no straight answer to know how to prepare yourself for selling the family house

It is not easy. Let the emotions flow but do not let them influence your decision. You always want the best for the property, but that does not make you the best negotiator. Finding the right price is a process, and depends on whether there have been any recent comparable transactions or not. Be conscious of the wary investors, especially those who want to take advantage of the situation. Hire professional brokers/third-party consultants to help you deal with the process, and you must avoid being your realtor. To transfer the property to a deserving buyer at an acceptable price point is the best gift you can give to the house that has served you and your earlier generations for many years.

Consolidating assets can be a part of your retirement planning strategy as well. Read more about retirement planning here – Ten easy steps to retirement planning


The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at For more articles, please visit the website


The author has used his knowledge, experience, and understanding of the subject to write this article. Any views, opinions, and thoughts mentioned in the article belong solely to the author and not necessarily to the author’s employer (past or current), organization, committee, or other group or individual.

Under any circumstances, the author shall not be liable for any views or analysis expressed in this note. Further, the opinions expressed are not binding on any authority or Court. We advise readers to consult their financial advisor for assistance in their specific case.

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