It depends on many parameters and your estate planning. Gifting now means the property moves to your family member’s name during your lifetime, which can be helpful if they need to use or mortgage the property, and it avoids the Israeli probate process. However, it comes with the purchase tax cost (reduced) now, whereas inheritance transfers at death have no estate tax.

Additionally, if you want to retain flexibility (for example, to sell the property later for your own needs), you will lose that option once you gift it. From a tax perspective, some prefer inheritance because the heir could qualify for certain exemptions when they sell as an heir, and you avoid the immediate 1/3 purchase tax. From a practical perspective, gifting can prevent future family disputes and ensure a smooth transfer of assets.

Another crucial factor to consider in your estate planning is the potential impact of foreign (e.g., U.S.) estate taxes. Large estates, in particular, may find it beneficial to opt for gifting to make use of current exemptions.

Read our complete 2025 guide on gifting property in Israel.

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