By Rachel Popovich, Land Law Specialist at Kan-Tor & Acco* |
Inheriting property in Israel is both a meaningful and legally complex process, particularly for families who reside outside the country. Whether it involves an apartment in Tel Aviv or a piece of land in the Galilee, many individuals with Israeli roots face the challenge of transferring ownership through a legal system that may be unfamiliar. At Kan-Tor & Acco, we help international clients navigate this transition efficiently and in full compliance with Israeli law.
The Israeli Property Registration System: Tabu and Minhal
To understand the process, it is important to begin with Israel’s land registration system. Real estate in Israel is recorded either in the Land Registry Office—commonly referred to as the Tabu (טאבו)—or with the Israel Land Authority, known in Hebrew as Minhal Mekarkei Yisrael (מנהל מקרקעי ישראל). The Tabu is the most conclusive form of property registration and provides a clear legal title to the owner. Regardless of the registry involved, no real estate transaction or inheritance transfer is considered legally complete until ownership is officially registered.
Why Foreign Wills Must Be Recognized by Israeli Courts
For those living abroad who inherit Israeli property, the first critical step is the legal recognition of their rights within the Israeli legal system. A foreign will or court order is not automatically enforceable in Israel. Before any registration can occur, the heir must petition the Israeli Family Court to obtain either a Probate Order (צו קיום צוואה), in cases where a will exists, or an Inheritance Order (צו ירושה) if there is no will. This process involves submitting translated and notarized documents, often accompanied by an apostille certification, along with formal filings to the court. Only once this court order is obtained can the heir be officially registered as the legal owner of the property.
A Real-World Example: Dana from Toronto
Take, for example, a client named Dana from Toronto, who inherited an apartment in Tel Aviv from her late parents. Even though she holds a valid Canadian will, Israeli authorities require that will to be formally recognized through an Israeli probate process. Only after receiving a probate order from the Israeli Family Court can Dana be registered as the apartment’s owner in the Tabu. Without this step, the apartment cannot be sold, rented, or legally transferred.
Tax Implications: What Heirs Must Consider
Alongside the legal process, heirs must also consider tax implications. Israeli real estate transactions can trigger Capital Gains Tax—known in Hebrew as Mas Shevach (מס שבח)—and Purchase Tax, or Mas Rechisha (מס רכישה). However, certain exemptions may apply in the context of inheritance or gifts within the family. For example, property inherited by a child from a parent may be exempt from purchase tax, depending on the circumstances and timing of the transaction. Nevertheless, the law is detailed and technical, and careful planning is crucial to avoid unexpected tax liabilities. Seeking legal guidance at an early stage can help preserve family assets and ensure compliance.
Transferring Property as a Gift: A Matter of Timing and Structure
Another common scenario involves parents wishing to gift property to their children. While this can be done during one’s lifetime, it must be carefully structured and legally documented to be valid and potentially exempt from taxes. Informal or verbal promises carry legal risks and can lead to disputes, delays, or penalties. Proper documentation, legal registration, and professional consultation are essential for a secure transfer.
Avoiding Family Disputes Through Clear Agreements
Disagreements among heirs are unfortunately common, particularly when there is no clear division of assets or when one family member wants to sell while another prefers to hold the property. These disagreements can escalate into lengthy court battles. To prevent such situations, we recommend that families formalize inheritance or gift agreements in advance. At Kan-Tor & Acco, we regularly assist in drafting such agreements and ensure they are enforceable under Israeli law. We often coordinate with foreign attorneys to address international legal considerations and protect the interests of all parties involved.
Don’t Wait: Early Legal Consultation Is Key
For those who suspect they may inherit property in Israel, or who are considering transferring assets to the next generation, the best course of action is not to wait. Consulting a legal professional early on can clarify your rights, avoid legal pitfalls, and minimize tax exposure. Whether you are dealing with a new inheritance, planning a property transfer, or unsure of your legal standing, our team is ready to help.
How Kan-Tor & Acco Can Assist
At Kan-Tor & Acco, we specialize in assisting clients living outside Israel with every aspect of property inheritance and transfer. From legal recognition of foreign wills to tax planning and registration, we provide the comprehensive support necessary to navigate these matters smoothly and securely. Our team combines deep local knowledge with international coordination to give clients peace of mind during what can often be a complicated and emotional process.
* Rachel Popovich is a Land Law Specialist at Kan-Tor & Acco, advising clients from around the world in property inheritance and land transfer matters in Israel. For personal guidance and a professional approach, contact our office and let us assist you in securing your family’s rights in Israel.
