If you’ve inherited property in Israel but live abroad, you may feel uninformed. The Israeli real estate law and inheritance law process has its unique legal steps and, in some cases, tax implications (no estate tax in Israel), which can be daunting for those unfamiliar with the local Israeli laws. Selling an inherited property in Israel can be handled smoothly and simplified from A to Z.
In this comprehensive guide for overseas heirs, we explain how to sell inherited property in Israel and outline how our firm can simplify your estate process. We’ll cover the inheritance procedure, preparing the property for sale, taxes, and common challenges and their solutions.
The Israeli Inheritance Process
Before you can sell, you must be recognized as the legal heir of the inherited property. Israel’s inheritance laws require heirs to obtain a formal Order of Inheritance or Probate confirming their rights.
If the deceased left a will, it must be submitted for probate through the Israeli Registrar of Inheritance. If no will exists, heirs must apply for a succession order under Israel’s Succession Law of 1965.
This legal framework determines how the estate is split among heirs by default. In either case, you cannot sell inherited property until an Israeli court or Registrar issues the appropriate inheritance court order declaring you as an heir.
Obtain the necessary documents early:
- The death certificate,
- The original will (or exemplified copy),
- Identification for all heirs,
- A copy of the property’s title deed.
It is crucial to file this inheritance process as soon as possible to ensure a smooth and timely sale of the property.
Obtaining the probate or succession order can take 3-6 months. Any delay in securing the inheritance order delays your ability to sell.
Our firm’s Israeli probate attorneys routinely handle these petitions on behalf of foreign clients, ensuring that all paperwork is in order and filed to the tee. We also assist with translating Hebrew documents and verifying your signatures abroad, saving time, energy, and flights to Israel for the inheritance proceedings.
Preparing to Sell an Inherited Property in Israel
Once you are officially recognized as an heir and a request for title recording will be filed in your name, you can move forward with the sale. Here are the key steps to prepare:
Transfer the Title into Your Name
After receiving the inheritance order, you must update the property’s title with the Israel Land Registry (Tabu) to reflect the new ownership. This usually involves submitting the order, your ID. Our firm is committed to handling the title transfer process for you again to the tee.
Settle Any Outstanding Dues
Check for any unpaid property taxes or fees, if any. In Israel, the bi-monthly municipal tax (Arnona) on real estate must be paid by the property owner. Ensure that the Arnona (property tax), utility bills, and HOA building maintenance fees (if applicable in a condo) are up to date. Clearing these obligations is necessary because buyers or the Land Registry will require proof that no debts are tied to the property.
Obtain a Property Valuation
It’s smart to determine the market value of the inherited property before listing it. You can hire an appraiser or compare recent sales in the area to determine the value. Knowing the property’s worth is also a crucial factor in calculating capital gains tax, if any, a tax on the profit from the sale of a property. Our Founder, Rahav D. Aharoni, Adv., has over 20 years of experience in Israeli real estate valuations and can advise accordingly.
Consider Repairs or Improvements
If the property is in less-than-ideal condition, consider minor renovations or a thorough cleaning to maximize its appeal. While you likely don’t want to invest in a home you plan to sell, addressing any glaring issues (like leaks or peeling paint) can maximize the equity. These preparatory steps set the stage for a smoother sale. Our firm often assists overseas clients with coordinating appraisals, paying outstanding bills on their behalf, and even arranging property maintenance when heirs lack local access. We act as your on-the-ground representative in Israel, so that your inherited home is sale-ready.
The Sale of Inherited Property Process in Israel from Abroad
Can you sell an Israeli property without traveling to Israel? Absolutely. As a foreign-based heir, you have a couple of convenient options:
Irrevocable Power of Attorney (IPOA) for Ad Hoc
One of the quickest options for selling your Israeli property from abroad is to use IPOA. This allows our attorneys to handle all the sale documents and closing formalities on your behalf. The IPOA can be signed in front of a notary or at an Israeli consulate near you, and then it will be given an apostille certification. With a properly executed IPOA, our lawyers can sign all necessary contracts and even the deed transfer for you, saving you the trip and ensuring a smooth process.
Signing at the Israeli Consulate
Certain sale documents (for example, the deed and tax forms) can be signed at the Israeli Consulate or Embassy in your country. The consular officials verify your identity and signature, which is accepted in Israel. We will prepare all documents in advance and send them to you with clear instructions. Many of our clients in the U.S. and Canada are saving this process, and we can save them precious time.
Negotiating and Closing the Deal
Once you receive offers, negotiations may go back and forth on price and terms. This stage is where having an Israeli attorney is vital.
We assist in reviewing offers, advising you on any clauses, and negotiating terms that protect your interests. All sale agreements in Israel must be in writing and signed by both parties to be valid. Our attorneys will draft a robust Sale Agreement in Hebrew and English, outlining the purchase price, payment schedule, and any special conditions (such as repairs or vacant possession). We ensure that you are fully informed in English before signing, and then our firm handles the formal signing process with the buyer’s side.
After signing the sale contract, Israeli law requires filing a notice with the Land Registration Office and reporting the transaction to the Tax Authority within 30 days. We handle these filings on your behalf, ensuring that every step of the process is thorough and in compliance with the law, giving you peace of mind.
The contract will stipulate a timeline for completion (closing), usually 90-150 days, during which the buyer arranges financing and our firm obtains the necessary tax approvals. On the closing date, the remainder of the purchase price is paid, you (or we, via POA) sign the final transfer deed, and the buyer is given possession of the property.
After handling the registration of the new owner in the Land Registry and ensuring all conditions have been met, we then transfer the sale proceeds while addressing the exchange rate accordingly to maximize your equity.
Throughout this sales process, communication is key. We pride ourselves on keeping our clients updated at every single step.
With offices in Tel Aviv, Florida, New York, and Los Angeles, we accommodate your time zone and speak your language. Selling an inherited property from overseas may seem complex, but with our firm handling the legal work and logistics, it can be done smoothly.
Tax Implications of Selling Inherited Property in Israel
One of the biggest concerns clients have is “What taxes will I owe?” Let us explain the tax considerations, both in Israel and back home:
No Inheritance Tax in Israel
Israel does not impose any inheritance tax or estate tax on the act of inheriting property. Whether you inherit real estate worth $50,000 or $5 million, there is no Israeli tax just for receiving it. Israel eliminated its inheritance tax decades ago. However, other taxes kick in when you sell the property.
Capital Gains Tax (Mas Shevach)
When you sell an Israeli property (inherited or otherwise), you may be subject to Capital Gains Tax (CGT) on any profit. The gain is the difference between the sale price and the property’s original purchase price (adjusted for inflation and improvements).
Do foreigners get any tax breaks?
In the past, Israeli residents enjoyed certain exemptions (like a once-in-a-lifetime home sale exemption) that could apply to inherited homes. However, recent legal changes have removed most exemptions for non-residents.
Our firm specializes in these tax rules and, in many cases, we’ve succeeded in significantly reducing or even eliminating the Israeli capital gains tax for our clients.
Betterment Tax (Hetel Hashbacha)
This is a less common tax that can come as a surprise to sellers. Betterment tax is a one-time levy on the increase in property value due to specific rezoning or municipal improvements.
For example, if the city approved a plan allowing additional floors or units on the property (even if you didn’t make use of it), it’s considered to enhance the property’s value.
Rarely does a sale trigger a betterment tax – it only applies if such rezoning changes occurred. We will investigate if any betterment levy applies to your property and handle the paperwork to calculate it accurately. If owed, this tax is usually paid as part of the closing process.
U.S. and Home Country Taxes
Tax laws can change, so we recommend consulting your U.S. or Canadian CPA in conjunction with our services. We are happy to work with your accountant to provide any needed documents.
Conclusion: While Israel imposes no tax on inheriting property, selling it may involve capital gains tax.
Managing the Property from Afar
Inheriting a home in Israel while living overseas raises practical questions: Who is currently taking care of the property? Is it standing vacant, and if so, is it secure?
Maintenance and security are crucial, especially if many months pass before the sale. If needed, we assist clients in arranging for property management services, which range from periodic check-ins and paying utility bills to maintaining the garden.
If the property is rented out, we verify that it’s properly registered and that you have the right to collect rent.
Legal and Language Barriers? We Are Problem Solvers
Engaging a bilingual Israeli attorney who is based in the U.S. as well is a winning formula.
Our firm not only handles the legal work, but we also ensure that everything is simplified for you in English.
You are always informed, regardless of the distance. As one of our core values, we believe in guiding clients on Israeli law.
Why Choose Aharoni Law Firm to Handle Your Sale?
Our experience. Our references and our unwavering promise to complete the mission to the tee.
Decades of Specialized Experience
We focus on Israeli estate, probate, and property law. With almost 18 years of dedicated practice helping heirs and property owners worldwide, our founder, Rahav D. Aharoni, Adv., has a proven track record. Our team has deep expertise in Israeli inheritance procedures and real estate transactions for non-residents.
Proven Results and Reputation
At Aharoni Law Firm, we’re trusted by thousands of clients worldwide, and a significant portion of our business comes from referrals. We’re proud to be known as the go-to Israeli law firm for overseas heirs. Our past clients, from the U.S., Canada, and the UK. We invite you to read our testimonials and even speak with former clients; transparency and trust are the cornerstones of our practice.
Full-Service Convenience
When it comes to selling an inherited property, multiple steps and disciplines are involved, including probate, real estate brokerage, tax filings, and currency exchange. Instead of you having to coordinate a separate lawyer, tax advisor, and realtor, we can handle virtually everything in-house or through our vetted network. From obtaining the inheritance order to closing the sale. Our firm manages the entire process seamlessly. This integrated approach saves time, funds, and energy.
Bilingual and International
We operate in both Israel and the United States, with an office in Tel Aviv and representatives in New York, Los Angeles, and Florida. Our attorneys are fluent in English and Hebrew, so you will never face a language barrier. Being physically present in multiple time zones means we are accessible to you during your working hours.
We know how to bridge Israeli processes with U.S. and Canadian expectations – whether it’s explaining Israeli concepts in familiar terms or accommodating a wire transfer to your local bank. You get the benefit of an Israeli legal team that understands Western client service standards.
Personalized, Hands-On Service
At our firm, our Founder, Adv. Rahav Aharoni, Adv, personally oversees every case our firm takes on with patient and personal care.
Our mission is to make selling your inherited property in Israel as simple and successful as possible for you. We blend legal expertise with genuine care, aiming not just to get the job done but to exceed your expectations.
As one client put it,
“Rahav has absolutely gone out of his way to offer us the best advice possible… making it easy for us who are not familiar with Israeli law. – Jon G.” (Our Client References).
That level of dedication is what you can expect when you work with us.
Contact Our Experienced Israeli Law Firm for A Simple Sale of Your Inherited Property
Aharoni Law Firm is here to solve any obstacles so that you can sell your inherited property successfully.
Contact us today to schedule a complimentary consultation. We’ll discuss your goal, answer all your questions, and outline a clear plan. As highly referred Israeli inheritance and real estate lawyers, we have the experience and passion to achieve the optimal result for you.
US/Canada Toll-Free: +1-888-923-0022
Israel: +972-3-9055478
Email: rahav@aharonilaw.com
Whether you’re in New York, Los Angeles, Florida, Toronto, Montreal, or anywhere in between, our bilingual team is ready to assist. Let us put our proven expertise to work for you, so that selling your inherited property in Israel becomes one less thing to worry about and one more thing to celebrate.
FAQs: Selling Inherited Property in Israel
Do I need to travel to Israel to sell an inherited property?
No, you can complete the entire sale from abroad. Israeli law allows you to use an Irrevocable Power of Attorney. With our assistance, you can authorize our lawyer to represent you in Israel, allowing all contracts and closing papers to be handled without requiring your physical presence.
Is there any inheritance tax when I inherit or sell property in Israel?
Israel does not levy inheritance tax or estate tax on inherited property. You inherit the property tax-free. Even when you later sell, there is no special “inheritance tax” on the sale. However, in some cases, when selling, you will be subject to capital gains tax that can be reduced aggressively
How much is the capital gains tax on selling an inherited property in Israel?
How long does it take to sell an inherited property in Israel from start to finish?
The timeline can be broken into two parts: (1) the inheritance process, and (2) the sale process. The inheritance (probate) stage to get the property legally in your name can take 3-5 months in straightforward cases. More complex estates can take longer, sometimes up to a year.
Once you have established an inheritance order, the sale process itself involves finding a buyer, signing a contract, and closing the transaction.
After you sign a sale agreement, expect another 3-5 months for closing (to allow for the buyer’s mortgage approval, if any, title transfer, etc.). In total, from listing to closing, many sales are completed in roughly 3-5 months (again, after the inheritance stage is complete). We expedite each step wherever possible – for instance, by preparing documents in advance and staying on top of the authorities – to shorten the timeline.
Can I sell the property before it’s officially registered in my name?
Yes, it is possible to condition a signed sale agreement on the sale prior to completing the probate and title recording.
