Death is never an easy subject and that also translates into having an effect on the value of a property. Whether you’re looking to buy or sell, knowing about the impact death can have on a property can ensure you’re able to make the right choices.
Yes, death does decrease property value. However, the extent to which the value is affected can depend on the type of death, the use of the property, demand for housing in the local area plus other factors that I’ll run through in this post.
How Much Does a Death Affect Property Price?
The decrease in value a death has on a property looks to be in the region of 1% to 50%, however, depends heavily on the type of death.
|Death Type||Market Discount|
|Death by natural causes||1% to 10%|
|Homicide||15% to 50%|
|Suicide||10% to 30%|
|Accidental death (fire, electrocution, falling)||15% to 30%|
As you can see, death within a property definitely has an impact on property prices, however, there are quite wide differences when looking at the data.
Some of this could be due to risk already being priced into the property, for example with a homicide, if the property is in an area that is notoriously dangerous, the property price doesn’t reduce as much if there’s a homicide in an area where it’s unexpected.
There is also quite a lot of difficulty in measuring the price movements which I’ll explain below.
Difficulty in Measuring Price Changes
- Property damage. Trying to determine exactly how much a death decreases property value can be difficult when the property also sustains a lot of damage. For example, if there is a significant fire that causes a death, the home, or homes depending on how bad the fire was, are usually rebuilt meaning there isn’t really a like for like comparison.
- Impacts of inflation over time. With house prices increasing significantly in recent years, even if the property previously sold five years ago and then sells again after a death, there has been five years of compound growth on the property value. This can make comparison hard because increasing 5% per year, after five years the property is worth 28% more, so if the property sells for the same amount after five years, it’s actually selling at a major loss compared to the value without the death.
- Death not disclosed. Depending on the type of death and location, the owners may not have had to disclose the death to the buyers of the property. This means some properties have zero price impact, however without it being disclosed, there is no or limited way to track this in the pricing data.
Use of the Property
The use of the property also plays a part in how much the price gets affected. From my research, if it’s a home within a retirement community where the average age of the residents is high, there is less impact on property prices.
This possibly could be due to people understanding it’s a retirement area that has a higher likelihood of death. Also, a death may have happened in a lot of the houses within the area so some of the reduction may have already been priced into the property. This type of death is more than likely due to natural causes as well as people are dying of old age or illness within retirement communities, not a sudden tragic death.
If you aren’t phased personally about buying a property that has had a death in it then it could be an excellent investment opportunity to buy a house at a reduced price.
For me I don’t think I’d be particularly phased if it was a natural death from old age or illness, however, I think I’d be a bit nervous about buying a house that had a fire, electrical issues, or a homicide. This is mainly because of any residual risks that weren’t rectified after any repairs or police intervention.
This seems to align with the general feeling within the market as natural deaths don’t seem to cause much of an impact on property values, however other types of dearth can have quite a significant impact.
If you are thinking about buying one of these as a home or investment property to rent out, just be mindful of the resale value. If you aren’t planning on selling within a number of years or even decades then that’s great. There is a wide consensus that the further in the past the death happened within the property the less impact it has on the price, so effectively your property may rise in price faster than the average for the area.
Disclosing Death When Selling Property
Each country has its own rules and regulations around what you have to disclose when selling a property. Usually, if there is a tragic death or major incident property owners have to disclose the details to potential buyers.
This mainly relates to whether there could be a problem for future owners, for example, if there’s a serious fire, electrical issues, or flooding. This can mean some natural deaths don’t have to be reported. If you do have any questions regarding disclosures of death, make sure to contact an estate agent or solicitor that can give you advice.
Summary – Does a Death Decrease Property Value?
Overall, from my research, it does appear that death does decrease property value although there are a number of factors that play a part in the extent of the reduction.
If you are thinking about buying or selling a property that has had a death within it, make sure to speak to a property agent and they will be the best placed to advise you on your next steps. Even if a death in a property doesn’t phase you personally, it could potentially affect the resale value of the property, so making sure you’re fully aware of all the implications will make sure you’re making the right decision for you.
Also, these conclusions are based on my own research and just for information purposes only. Make sure to speak to a professional if you have any questions before you make any financial decisions.
Hi, I’m John. I’ve always had a keen interest in Finance, so much so that I’ve made a career out of it! This site is a place where I can share everything I’ve learned as well as give me the excuse to research certain topics.
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