How to Gift Property in Israel to Family Members in 2025

A 2025 Guide for Gifting Property, Land, or Apartments in Israel to Family Members

Gifting real estate in Israel – whether land, a house, or an apartment – is a process that involves Israeli legal procedures and tax considerations. This comprehensive guide (up to date as of 2025) explains how to gift property to family members in Israel or an individual, covering everything from legal steps and required documents to Israeli tax implications. Our legal team has written this guide to assist individuals from around the world, particularly those based in the United States and abroad, who have family or own property in Israel.

Gifts of Real Estate in Israel vs. Other Countries

In many countries, gifting property to a close relative can be a straightforward and tax-free process. Israel, however, treats a gift of real estate as any property transaction, which means it must be registered and trigger a purchase tax for the receiver. There is no general gift tax or inheritance tax in Israel. Important factors to understand include:

Close family gifts are partly tax-exempt. When an Israeli property is given to a close family member (as defined by law), the transfer is exempt from the usual capital gains (“betterment”) tax for the gifter (giver), and the receiver pays a reduced purchase tax (Mas Rechisha) equal to one-third of the normal rate. Essentially, Israel waives the gift profit tax if the gift is made to a defined relative, while taxing the recipient a fraction of the transfer tax.

Defining “Family” for Israeli Property Gift Exemptions

Israeli tax law strictly defines which family relationships qualify for the reduced taxes on gifted real estate. These “close family member” relationships include:

Spouse – Gifts between spouses (husband and wife, or same-sex spouses) qualify. Transfers in a divorce settlement are also tax-exempt.
Parent and child – This encompasses both directions (parent to child and child to parent). “Child” generally refers to both biological and adopted children. Gifts to grandchildren may be treated as “issue” of the parent (see below).
Descendants (“Issue”) – All direct descendants (children, grandchildren, great-grandchildren) are included. Additionally, spouses of these descendants are also included (e.g., son-in-law or daughter-in-law).
Spouse’s issue – Children or grandchildren of your spouse from another relationship (step-children, etc.) are included.
Spouse of each of the above – For example, you can gift to your child’s spouse or your parent’s spouse (like a step-parent) under the family exemption.
Siblings (limited cases) – Siblings are not automatically considered close family for tax purposes unless the property being transferred was initially acquired by one of you through a gift or inheritance from a parent or grandparent. In other words, if two brothers inherited a house from their parent (or one brother inherited and now wants to give half to the other), that sibling-to-sibling transfer can qualify for the exemption. However, if one sibling purchases a property on their own and wants to gift it to their brother or sister, it would not fall under the exemption as siblings per se, and regular taxes would apply.

Why do these definitions matter?

If your family relationship fits into the above categories, the Israeli Tax Authority will treat the transfer as an exempt “family gift” for the gifter’s capital gains tax. It will tax the recipient only a reduced purchase tax. If the relationship falls outside this scope (e.g., uncle to nephew), the transfer is treated as a regular sale, with full purchase tax and capital gains taxes due.

Before proceeding, it’s wise to confirm your relationship qualifies. Documentation (such as birth certificates or marriage certificates) may be needed to prove the familial connection in some cases, especially for less common scenarios (like a grandparent to grandchild or siblings via inheritance).

Legal Procedure for Gifting Property in Israel in 2025

Gifting property involves nearly all the same legal steps as a sale in Israel, except that no money changes hands. Below is a step-by-step guide on how to execute the transfer as of 2025:

1. Verify Ownership and Registration

First, verify how the property is currently registered. In Israel, land and property rights are recorded in one of a few registries:

Tabu (Land Registration Office): The official Land Registry for properties (often called Tabu). If your property is registered in the Tabu, obtain a title extract (נסח טאבו) to ensure the owner’s name is correct and see if any liens or mortgages exist. The extract will also show if the land is freehold or leasehold.
Israel Land Authority (ILA): Many properties in Israel are recorded on state-owned land, which is managed by the Israel Land Authority (ILA), also known as Minhal. In such cases, you effectively hold a long-term lease rather than outright ownership. The property may still have a Tabu registration noting the leasehold rights, but transfers often require ILA involvement (discussed below).
Other registries: A small number of properties are managed by alternative registries (e.g., certain cooperative or kibbutz lands, or church-owned lands). Generally, the process will mirror the Tabu process but may require additional consent from the landowner.

Ensure the property is indeed registered in the giver’s name and that any past transactions have been properly registered. If the property is not yet registered in the name of the gifter (for example, if it’s still in a deceased parent’s name), you’ll need to resolve that first (such as completing a probate or prior transfer) before the gift can occur.

2. Engage a Qualified Israeli Attorney

It is highly recommended to retain an experienced Israeli real estate attorney who specializes in non-residents.

Draft the necessary legal documents in Hebrew (the official language for filings) and ensure they meet Israeli law requirements.
Liaise with the Israel Tax Authority and Land Registry on your behalf.
Advise on tax declarations and help secure any exemptions.
Coordinate any required approvals (e.g., from the Israel Land Authority if the land is leasehold).
Ensure that all family members’ interests (especially those of minors) are protected according to law.
Advising on each step A to Z.

Given the cross-border nature, look for a firm experienced in real estate, inheritance, and cross-border transactions. Our firm, led by Rahav D. Aharoni, Adv., with over 20 years of experience, specializes in Israeli property and estate law, regularly assisting international clients (please read our client testimonials) with gifting property, probate, and title transfers. We can guide you through the process smoothly in English and Hebrew, ensuring you comply with both Israeli and foreign requirements.

3. Draft the Gift Agreement (Deed of Transfer)

A written gift deed or agreement is required. Key elements usually include:

IDs or valid passports of the parties: The gifter (current owner) and the receiver (recipient) with their identification details (Israeli ID number or passport number).
Description of the property: As per the land registry records (lot/block numbers, address, etc.).
Declaration of no consideration: A clause clearly stating the transfer is a gift with no payment or other compensation.
Possession date: Usually immediate, or a specified date when the donee takes over responsibility.
Conditions or reservations (if any): For example, parents who gift property might retain a life estate or the right to live in it. (Such arrangements should be carefully documented if intended.)

Both parties sign this agreement. An Israeli lawyer must verify their signatures by the land registry regulations. If the signing is done abroad, it should be at an Israeli consulate or before a local notary with an apostille stamp to authenticate the signatures for use in Israel.

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4. Sign Affidavits of Gift (No Consideration)

In addition to the deed, Israeli law requires affidavits (sworn statements) from both the gifter and the donee, confirming that the transfer is a genuine gift with no consideration. These affidavits typically include statements that:

The transfer is made out of love, affection, or family reasons, with no money or compensation given in return.
There is no hidden transaction or debt agreement behind the scenes.
The relationship between the parties is stated (to invoke the family tax exemption).

Both parties sign their respective affidavits in front of a lawyer or authorized official (similar to the deed execution). These sworn statements will be filed with the tax authorities, who carefully review such gifts to ensure they are bona fide.

5. Submit Transfer Forms to the Israel Tax Authority

Every property transfer in Israel (whether by sale or gift) must be reported to the Israel Tax Authority (Mas Hachnasa, specifically the Land Taxation Office) within a specified timeframe (usually within 30–40 days of signing the agreement). For a gift, the following are submitted:

Signed affidavits of gift (from both parties).
Declaration forms: There are standard land transfer tax forms that you fill in with the details of the transaction. On these forms, you indicate it’s a transfer “without consideration” to a relative and cite the legal provision for exemption (Section 62 of the Land Taxation Law for family gifts).
Supporting documents: Copy of the gift deed, IDs of both parties, and proof of relationship if required.
Tax calculations: The tax authority will evaluate if the giver owes any Capital Gains Tax (Mas Shevach) and if the recipient owes Purchase Tax (Mas Rechisha). For family gifts, the gifter typically claims an exemption under the family gift rule, and the donee is charged one-third of the standard purchase tax.

Important: Wait for the Tax Authority to issue approval (tax clearance) for the gift. They will send a certificate of tax clearance once any taxes due are paid or if the transaction is exempt. This certificate is essential – the Land Registry will not register the new owner without proof that all taxes have been settled or exempted. The tax clearance process for a gift can take several weeks, especially if the recipient requests additional documentation to verify the family relationship or the gifter’s tax exemption.

6. Pay Any Applicable Taxes or Fees

If the tax authority assessment determines that taxes are due (e.g., the one-third purchase tax for the recipient, or any partial betterment tax if the gifter’s exemption isn’t complete), those must be paid. The specifics of Israeli taxes on gifts are in the next section, but briefly:

The recipient will typically need to pay the reduced purchase tax (if not fully exempt). Payment must be made by the deadline specified (within 30 days of the transaction).
The giver usually won’t owe capital gains tax if it’s a qualifying family gift – that tax is exempt under Section 62 for close relatives. However, if for some reason the gifter doesn’t qualify for exemption (e.g., the recipient turned out not to fit the definition, or the gift wasn’t bona fide), the tax authority might assess capital gains tax on the deemed “sale”. In a straightforward family gift, this is not expected.
Betterment Levy (Hetel Hashbacha): Separate from the Tax Authority’s capital gains tax, check with the municipality if a local betterment levy applies. This is a fee payable to the local city or regional council when property value has increased due to zoning changes (for example, if additional building rights were granted in the area). If such a levy is due, it usually must be paid upon any transfer (gift or sale) before the city will issue a clearance. Obtain a statement from the municipality; if due, pay it to get the municipal clearance (Ishur Iriyah). (Not all transfers incur this – it depends on local planning events.)

7. Obtain Required Clearances and Documents

Before title recording, the checklist is as follows:

Certificate from the Israel Tax Authority: Confirming that all national taxes (purchase tax, capital gains) are paid or exempt.
Certificate from Municipality: Confirming municipal taxes (like annual property tax, Arnona, and any betterment levy) are paid up to date.
Mortgage discharge (if applicable): If the property had a mortgage, you’ll need either to pay it off or get the bank’s consent. For registration, any registered mortgage needs to be cleared, or the bank must provide a confirmation (discharge letter) to remove it from the title. Often, a bank will issue a letter of undertaking if the loan is being transferred or other arrangements are made. Essentially, you cannot gift a property free and clear until all liens have been resolved.

Make copies of all the above documents, as you will file them with the Land Registrar or the ILA office.

8. Israel Land Authority (ILA) Approval (If Applicable)

If the property is located on Israel Land Authority leasehold land, an additional step is to obtain the ILA’s consent to transfer the lease to the family member. Many homes in Israel (especially in newer cities or certain areas) are on long-term leases from the ILA (typically 49 or 98-year leases).

Check the title or lease contract to see if ILA consent is required for transfer. In many cases of “capitalized” leases (where lease payments for the term are prepaid), transfers between family members may not require a fee; however, formal notification or approval is still necessary.
Submit a transfer request to ILA, which typically involves completing an application form and providing the gift deed and affidavits. The ILA may require a modest fee for processing. In some cases, if the lease is not fully prepaid, they could charge a lease transfer fee (a percentage of the land value). However, transfers to first-degree relatives often receive lenient treatment, and in specific programs, a transfer to a spouse or child can be done without additional charges. Always check the current ILA policies or have your lawyer handle this matter.
ILA issuance of consent document: Once approved, the ILA will provide a letter or stamped form indicating they consent to the transfer of the lease rights to the donee. This document will be needed for final registration. (Note: If the land is owned by JNF/Keren Kayemeth or another body, their consent might also be required similarly.)

Keep in mind that if the property is directly owned (not leasehold) in the Tabu, you can skip this step. The majority of private apartments and houses in Israel are registered in Tabu outright, but significant portions (especially rural land or specific neighborhoods) involve ILA leases.

9. Register the Title Transfer

With all the above in hand, the final step is to record the ownership in the Land Registry or relevant registry:

Land Registry (Tabu) Registration: Submit an application to the Land Registrar (Tabu) for registering the change of ownership. The following documents are required:
1. The deed of transfer (gift deed) is signed by both parties and certified by an Israeli lawyer or notary.
2. Tax Authority approval of the transaction (confirming taxes paid/exempt).
3. Municipal confirmation of no outstanding property taxes or levies.
4. If applicable, ILA consent letter (for leasehold properties).
5. If a mortgage was present, the bank’s confirmation of lien release.
6. IDs and powers of attorney: If someone is registering on behalf of the parties, include the notarized power of attorney. Ensure that all documents signed abroad have apostilles attached.
The land registrar will verify the identities of the parties (or their legal representatives) and the chain of title. Once satisfied, they will record the donee as the new owner or rights holder in the land registry. A new title extract can be obtained a few weeks later, showing the updated ownership.
Israel Land Authority (ILA) Registration: In cases of ILA leaseholds, the lease transfer is sometimes recorded through the ILA’s system rather than the Tabu (especially if the land isn’t individually registered in Tabu). The procedure is similar: you provide the gift deed, tax clearances, and other relevant documents directly to the ILA office, and they update their records to reflect the new lessee. Often, both Tabu and ILA records must be updated: the Tabu will display the new holder of lease rights, and the ILA’s internal records will also reflect the change. Your attorney will handle lodging the documents with the correct office.

When the process is complete, ensure the recipient updates their utilities and municipal records to reflect their new name (for ongoing bills such as electricity, water, and Arnona municipal tax). This is usually straightforward once you have proof of the updated ownership.

10. Special Cases and Safeguards

Minors or incapacitated family members: If gifting to a minor child (under 18) or someone who is legally incapacitated, Israeli law may require court approval. The court (Family Court or Guardianship Court) would verify that the transfer is in the best interest of the minor/ward. Typically, a parent or legal guardian must petition the court for permission to transfer property to a minor, even if it’s a pure gift, to prevent misuse of a child’s property rights. Seek legal advice in such cases.
Retaining rights of use: If the gifter intends to continue living in or using the property after gifting (common in parent-to-child gifts), consider registering a life estate (usufruct) or a cautionary note on the property to protect that right. This way, the parent can gift the apartment to the child but keep a legal right to reside there for life. Such arrangements should be made with legal counsel to ensure they’re properly documented in the land registry.
Revoking a gift: Under Israeli Gift Law, once a gift of property is executed and registered, it’s generally irrevocable except under minimal circumstances (e.g., extreme misconduct by the recipient or conditions specified in the gift deed). Be sure you want to proceed before finalizing the transfer, as you won’t easily be able to get the property back later.

With the legal process outlined, we’ll now delve into the tax implications on both the Israeli side and the U.S./international side.

Israeli Tax Implications of Gifting Property

One of the most critical considerations in gifting real estate is understanding the tax implications in Israel. While Israel does not have a separate “gift tax,” real estate transfers can trigger two central taxes: Capital Gains Tax (Mas Shevach) for the seller or giver, and Purchase Tax (Mas Rechisha) for the buyer or recipient. Fortunately, family gifts receive preferential treatment:

Capital Gains Tax – Gifter

In a regular sale, the seller pays capital gains tax on any increase in the property’s value since acquisition (up to 25% on the gain for non-residents). However, Section 62 of the Real Estate Taxation Law exempts the giver from capital gains tax for gifts to family members. This means if you give property to a close family member (as defined earlier), you do not pay any betterment tax on the transfer. The transaction is reported, but the tax authority grants a full exemption to the gifter on the “deemed sale.” (If the gift is to someone outside the defined family circle, the gifter would owe the usual tax on any gain, as if they sold at market value.)

Purchase Tax – Recipient

The purchase tax is a one-time acquisition tax that buyers normally pay when purchasing Israeli real estate. The rate is graduated based on the price and the buyer’s status.

For example, Israeli residents purchasing their primary home pay lower rates (starting at 0% up to a threshold), whereas foreign buyers or investors pay higher rates (8% on the first approximately NIS 6.055 million, and 10% on any value above that, as of 2025). In the case of a gift to a family member, the recipient pays only one-third of the normal purchase tax that would apply to that transaction.

In other words, the Tax Authority calculates the purchase tax that would apply if this were a regular sale at the property’s market value, and then charges the donee one-third of that amount. This concession significantly lowers the tax burden on the recipient.

If the recipient is an Israeli resident with no other home, they are taxed as a first-time homebuyer, which usually enjoys a 0% tax rate up to a particular property value (adjusted yearly). For instance, as of 2022, an Israeli buying their first home paid 0% on roughly the first NIS 1.8 million. One-third of 0% is 0%, so many intra-family gifts between Israeli residents end up completely tax-free if the property value is within the exempt first-home threshold. Above that threshold, the donee would pay one-third of the stepped rates. (E.g., if an Israeli son with no other property receives a gift apartment worth NIS 2.5 million, he’d usually pay about 3.5% on the portion above NIS 1.8M; at one-third rate, it becomes ~1.17% on that portion – a substantial reduction.)
If the recipient is a foreign resident or already owns a home, they are taxed as an “investor” for purchase tax purposes. The standard investor/foreign rate is 8–10% as noted. At one-third, this comes to approximately 2.67% on the first ~NIS 6.05M and 3.33% on the rest.For example: A U.S. resident gifting an Israeli condo to his daughter (who is also in the U.S.) – if the apartment is worth NIS 3 million (~$800k), usually a foreign buyer tax would be 8% = NIS 240k. At one-third, she would pay about 2.67% = NIS 80,000 ($ 22,000). While not zero, it’s still a significant savings compared to a typical purchase scenario.
If the gift is between spouses: Married couples in Israel can usually transfer property to one another without purchase tax under special provisions, particularly if it’s their primary residence. Additionally, transfers as part of a divorce settlement are tax-free.
If the gift involves more distant relatives (non-exempt), then the recipient would not receive the one-third rate and would owe full purchase tax, like any buyer. For instance, gifting to a nephew would mean the nephew pays full purchase tax as if he bought the property, because “nephew” isn’t in the defined close family group.

Note on the “Close Family” Exemption

To use these tax benefits, the gift must truly be within the allowed family definitions. The tax authority may request documentation (e.g., birth certificates to verify the parent-child relationship). Misrepresenting a sale as a “gift” to avoid taxes is illegal and can lead to penalties. They look for signs of any payment or quid pro quo – the affidavits and possibly even bank statements may be scrutinized to ensure no money changed hands beyond what was reported.

No VAT or Income Tax

Generally, VAT (18%) does not apply to the private sale or gift of second-hand real estate between individuals; it only applies to new properties from developers or commercial transactions. Receiving a gift is not considered income, so it’s not subject to income tax for the recipient.

Local Taxes

Aside from the national taxes, remember the municipal “Betterment Levy” mentioned earlier. If applicable (i.e., the property value was boosted by rezoning), it must be paid for the transfer to be completed. This levy is distinct from the capital gains tax, also known as the “betterment tax” (a confusingly similar term).

For example, if the city recently changed the zoning to allow more building area, they might charge, say, 50,000 NIS when the property changes hands, even if it is given as a gift. Check with your attorney or municipality to determine if any “hetel hashbacha” is assessed on your property.

Future Sale by the Recipient – “Continuity” of Tax Basis

When you gift a property to a family member, someone may eventually pay capital gains tax – if not now, then potentially later when the property is sold. Israel applies a “continuity principle” for gifts and inheritance: the recipient effectively steps into the shoes of the original owner for tax purposes. This means:

If the recipient later sells the property to a third party, they will owe capital gains tax on the entire gain since the property’s original purchase by the family (not just since the gift date). Because the gifter was exempt at the time of the gift, the tax authority will capture the gain when the property is eventually sold outside the family.

For example, a mother bought an apartment in Tel Aviv in 2000 for $200,000 and gifted it to her son in 2025, when it was worth $500,000. The mother pays no tax on the gift. If the son later sells it in 2026 for $550,000, the Israeli tax will calculate the gain from $200,000 (original) to $550,000 (sale price), and he’ll pay tax on the $350,000 increase.

The capital gain that accrued during the mother’s ownership is taxed on the son’s sale. This is why Israel is comfortable not taxing the gift itself – the tax is deferred until a real sale occurs.

There is no step-up in basis at death or gift in Israel. This contrasts with some countries (like the U.S. for inheritance) that reset the basis to market value at death. In Israel, whether you get the property by gift or inheritance, you inherit the original tax history. The only exception might be if a special exemption can be applied when the heir sells (Israel had some one-time inheritance sale exemptions under certain conditions). However, generally, plan that someone will eventually pay the capital gains from the original purchase price.

The practical upshot: From an Israeli tax perspective, passing property at death vs. gifting during life can result in a similar overall tax when the property is ultimately sold to an outsider, due to this carryover of cost basis. However, gifting during life triggers the purchase tax now, whereas inheritance triggers no purchase tax. This often means waiting and transferring via inheritance is more tax-efficient, unless there is a compelling reason to gift earlier (such as helping a child immediately, planning around foreign tax issues, or avoiding probate complexities).

U.S. and International Tax Considerations

Transferring Israeli property can also have tax consequences in other jurisdictions, particularly the United States, if one or both parties are U.S. taxpayers. Here’s what to consider:

U.S. Gift Tax (for U.S. Gifters)

If you (the gifter) are a U.S. citizen or U.S. tax resident, U.S. gift tax laws apply to your worldwide assets, including Israeli property you give away.

No immediate income tax: The act of gifting property is not an income-taxable event in the U.S. (you don’t realize capital gains just by gifting). So you won’t pay U.S. capital gains tax at the time of transfer. (If instead you sold the property and gave cash, you’d pay U.S. tax on the gain because a sale occurred. A gift avoids immediate gain recognition.)
Gift tax reporting: You are required to file a U.S. gift tax return (IRS Form 709) for the year you make the gift if the value exceeds the annual exclusion (which is $17,000 per recipient for 2023, and $19,000 for 2025). A transfer of real estate will almost always exceed that, so you’ll need to file Form 709. This is an informational return if no tax is due (see below).
Gift tax exemption: The U.S. imposes a gift tax on large lifetime gifts; however, each person is entitled to a lifetime exemption amount. As of 2025, the lifetime estate and gift tax exemption is approximately $13.99 million per individual (set to decrease in 2026 under current law). This means that unless your cumulative lifetime gifts (plus estate) exceed ~$14 million, you won’t actually pay out-of-pocket gift tax – you just use up part of your exemption. For example, gifting a $500,000 property to your child will require filing a 709, but it will just reduce your remaining exemption; no tax due because $500k < $13.99m.
Spousal gifts: If you’re gifting to a U.S. citizen spouse, it’s tax-free under the unlimited marital deduction (no 709 needed). If gifting to a non-U.S. citizen spouse, there’s an annual limit (around $175,000 in 2024, indexed) on tax-free gifts to them – beyond that, it would use your exemption.
Carryover basis in the U.S.: Similar to Israel’s continuity, U.S. tax rules give the recipient of a gift a carryover basis in the property. This means if you gift a property to your child, and later they sell it, for U.S. capital gains tax, they will calculate the gain from your original cost basis. (However, if the gifter paid Israeli capital gains tax on a hypothetical sale, that tax is moot in a pure gift scenario – instead, the gain is preserved for later.)

U.S. gifters should plan to file a gift tax return. It’s wise to consult a U.S. tax advisor to ensure compliance. The good news is you’re unlikely to owe actual gift tax unless you have a vast estate.

U.S. Tax for the Recipient of a Foreign Gift

If you are a U.S. person on the receiving end of a gift of foreign property (e.g., your Israeli parent gives you property and you’re a U.S. taxpayer):

No income tax is due on receiving a gift: The U.S. does not treat gifts as taxable income. You won’t pay income tax just for receiving Israeli real estate as a gift.
IRS Form 3520 reporting: The critical requirement is reporting. A U.S. person who receives gifts from a foreign individual or estate valued over $100,000 in a year must file Form 3520 with the IRS. This is an informational form to report the gift (or inheritance) from abroad. There is no tax due on it; it’s purely a disclosure. However, it’s very important to file on time – failure to file Form 3520 can result in hefty penalties (5% of the gift amount per month, up to a total penalty of 25%).
What to report: You’d list the value of the property received (the IRS expects a reasonable estimate in U.S. dollars) and the identity of the foreign giver (name, address). If it was inherited (i.e., the giver died and you received it through their will), you also report it similarly as a foreign inheritance.
No U.S. step-up if gift: Note that, unlike an inheritance where U.S. tax basis would step up to current value, a gift means you take the gifter’s original basis for U.S. tax. If the gifter is a foreign person, determining the basis (original purchase price, improvements, etc.) is essential when you eventually sell. Keep records of what the gifter paid for the property and any improvements, because you’ll need those to calculate U.S. capital gains when you sell the property someday.
If you later sell: As a U.S. taxpayer, when you sell the foreign property, you owe U.S. capital gains tax on the gain (with foreign tax credits for Israeli tax paid on the sale). Receiving it as a gift now doesn’t trigger that, but keep it in mind for the future.

If you’re a U.S. recipient, mark your calendar to file Form 3520 by the tax deadline (typically April 15 of the year following the gift, with a possible extension to October). It’s filed separately from your 1040 (mail it to the IRS – it has its address). Many people are unaware of this requirement, but the IRS has been strict about foreign gift reporting in recent years.

Other Countries’ Tax Considerations

Laws vary widely by country. Here are a few general notes if you’re not U.S.-based:

Countries with gift or inheritance taxes: Many countries (e.g., much of Europe) do not tax foreign real estate gifts directly; however, some have inheritance tax regimes. For example, Canada does not have an inheritance tax, while the UK does. If you’re in the UK, for instance, a gift of a foreign property might count towards your estate for inheritance tax if you pass within 7 years, etc. Always check local laws or consult a tax professional in your country.
Double Tax Treaties: Israel has tax treaties with several countries (including the U.S.) to avoid double taxation of income. However, estate and gift taxes are not always covered by income tax treaties. Israel’s treaties generally don’t give Israel taxing rights over a gift of an Israeli asset by a non-resident.For example, if a U.S. resident gifts an Israeli property to another U.S. resident, the Israel-U.S. treaty may prevent Israel from charging capital gains tax, as neither party is an Israeli resident (and indeed, Israel’s domestic law exempts the gifter if the donee is a family member). But this gets technical; fortunately, in practice, Israel didn’t tax that scenario (except the reduced purchase tax on the donee).
If both the giver and receiver are foreign (non-Israeli): As mentioned above, Israel still charges the 1/3 purchase tax to the donee, even if they’re both abroad. And if they aren’t close family, Israel would charge full tax even though they are foreigners. But some treaties might override certain taxes. It’s uncommon, though, for Israel to waive real estate taxes due to a treaty, as the property is located in Israel (source-based taxation).
Foreign currency and reporting: When moving money related to property (e.g., if the donee pays off the gifter’s mortgage as part of the gift), there may be currency control or reporting issues in either country. Plan any financial aspect carefully so it doesn’t appear to be a sale payment.

Shortly, from an international perspective: Plan for reporting requirements (IRS Form 709 or 3520, or other countries’ equivalents), ensure any gift won’t trigger unintended tax in your home country, and keep documentation of the property’s value at transfer and original cost for future reference.

Intersection with Inheritance Laws

You might be deciding between gifting now versus leaving the property to family in your will. It’s worth understanding how Israeli inheritance laws work in case it influences your strategy:

No inheritance tax in Israel: As mentioned, Israel imposes no tax on heirs when property passes to them upon the death of the owner. The title can be transferred to heirs through a probate process (by will or by intestate succession) without any purchase tax or capital gains tax at that moment.
Israeli Probate Process: If you hold Israeli property and plan to bequeath it, please note that your heirs will need to go through the Israeli probate court to obtain a Succession Order or Probate Order, and then register the property in their names. This can take several months. Some people choose to gift in advance to avoid that procedure or to ensure a specific child gets the property without potential disputes.
Heir’s sale of inherited property: When heirs eventually sell an inherited property, the same continuity principle applies – they owe capital gains tax from the original purchase by the decedent (unless an exemption like the one for a single residential property sale applies). There is a provision that if a parent owned only one residential apartment and left it to children, the children can sometimes get a one-time tax exemption when selling it (stepping into the parent’s shoes as if the parent had sold at death). The laws on this matter were recently reformed, so seek advice if applicable.
Gifting as part of estate planning: If you have multiple heirs, you might gift a property to one child now to “even out” inheritances, etc. Be mindful that in Israel, unlike some countries, you generally have freedom in your will to distribute property as you wish (Israel doesn’t have strict forced heirship for children – only a spouse’s 50% elective share if no will, and children split the rest if no will). So, you could also handle it with a detailed will instead of gifting now. (Read more on our article: Will vs. No Will in Israel)
Mitigating family disputes: Sometimes gifts are given to clarify ownership and prevent future conflicts. If that’s a concern (for example, one child has been promised the apartment, and you worry siblings will quarrel), a gift during life can cement that. Just weigh it against the tax cost (the purchase tax) and loss of flexibility (you can’t change your mind easily after gifting).

It’s not uncommon for elderly parents in Israel to add a child’s name to the apartment deed for “heritance” purposes. Note that adding someone as a joint owner, if done without consideration and they qualify as a close relative, is treated similarly as a partial gift – taxes would apply proportionally. And it could expose the property to that child’s liabilities (e.g., if they have debts or are involved in a divorce). It’s often cleaner to either gift fully or leave in a will, rather than co-owning generationally, unless advised by an Israeli lawyer.

Practical Challenges for Foreign Nationals (and Solutions)

Transferring property in Israel while one or more parties are abroad introduces an additional layer of complexity. Here are common challenges and how to address them:

Signing Documents Abroad

As noted, any signatures on the transfer deed or affidavits must be authenticated for use in Israel. If you’re overseas, the easiest way is to sign at an Israeli Consulate, where an official can notarize your signature for use in Israel. Alternatively, sign before a local notary and then obtain an Apostille certification on the notarized documents (per the Hague Convention). The apostilled documents can then be sent to Israel and are accepted by the authorities. Ensure that the names and passport/ID numbers on the papers match your identification exactly.

Power of Attorney (POA)

You can appoint a family member or a lawyer as your attorney-in-fact to handle the paperwork and even sign certain documents on your behalf. This is done by granting a specific power of attorney for the property transfer.

The POA itself must be notarized and apostilled if signed abroad. Be aware that the Israeli land registry has strict rules on POAs – they often require a “specific” POA referencing the property and transaction. An irrevocable Power of Attorney (POA) is typically used in sales to protect the buyer. In a gift scenario, a regular, specific Power of Attorney from the gifter and/or donee can allow your lawyer to sign filings and appear at the registry on your behalf.

One caveat: some documents, such as the initial power of attorney, cannot be signed by an agent; they must be signed directly by the person granting it. You’ll need to sign the POA personally, but once that’s done, your representative can handle many subsequent steps.

Language Barrier

All official documents for registration must be in Hebrew (or Arabic in some registries). If you don’t read Hebrew, ensure you get translations or a bilingual attorney. Do not sign Hebrew documents that you don’t understand – your lawyer should either draft a bilingual deed or at least explain it to you in your language. For safety, some people choose to attach a translation as an exhibit to the contract; however, the Hebrew version will prevail in Israel.

Document authentication and IDs

If you’re a foreign citizen with no Israeli ID number, the Land Registry will use your foreign passport number to register the title. This is common for foreign owners. Just be sure to use the same passport number consistently on all forms.

If your passport expires, that doesn’t change the record – it’s just an identifier. Israeli authorities might also require a Copy of the Passport (notarized) for foreigners to confirm identity.

An Israeli Bank Account for Payments

If any payments are required (such as taxes or fees), a foreign giver or recipient may need to transfer money to Israel. Some taxes can be paid online or via international transfer; attorneys often handle this through their client trust accounts. Plan ahead for currency exchange and transfer times to ensure tax deadlines are met.

Timeline

A gift transfer can take longer than a regular sale because the tax approval step is more involved (the tax authority examines the gift claims). If all parties are abroad, factor in time for mailing documents or using a courier. What might be accomplished in a few weeks locally could take several months when coordinating internationally. Starting early and staying organized helps.

Representation of an Israeli Lawyer

Our firm has offices in the United States (New York, Florida, and Los Angeles), Canada, and the United Kingdom, and we work with clients from around the world remotely. We can also coordinate with Israeli notaries, translators, and other relevant parties as needed.

Finally, once your property is successfully transferred and registered in your loved one’s name, keep good records of all documentation for future reference (especially for the receiver’s eventual sale or estate purposes), and consider any updates needed to your estate plan after making the gift.

Contact Our Firm for A Complimentary Consultation

Please call us at 888-923-0022 or use our online form to contact an Israeli attorney at our firm.