If you’ve inherited property in Israel but live abroad, you may feel both grateful and overwhelmed. The Israeli real estate and inheritance process has its unique legal steps and tax implications, which can be daunting for those unfamiliar with the local context. The good news is that selling an inherited property in Israel can be handled smoothly without you having to travel, especially with the proper legal support.
In this comprehensive guide for overseas heirs, we explain how to sell inherited property in Israel and outline how our firm can simplify the process for you. 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 owner 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 relatives by default. In either case, you cannot sell inherited property until an Israeli court or Registrar issues the appropriate inheritance order naming you as an heir.
Obtain the necessary documents early:
- The death certificate,
- The original will (if any),
- Identification for all heirs,
- A copy of the property’s title deed.
If the deceased passed away abroad, additional steps apply (for example, documents may need notarization and an apostille for international validity). It’s crucial to start 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 several months. Any delay in securing the inheritance order delays your ability to sell.
Our firm’s Israeli probate attorneys routinely handle these applications on behalf of foreign clients, ensuring that all paperwork is in order and filed promptly. We also assist with translating Hebrew documents and verifying your signatures abroad, so you can rest assured that you don’t need to fly to Israel for the inheritance proceedings.
Preparing to Sell an Inherited Property in Israel
Once you are officially recognized as an heir and the property is registered 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, and various forms to the Land Registry. Our firm is committed to handling the title transfer process for you, ensuring it’s done correctly and efficiently, giving you peace of mind during this crucial step.
Settle Any Outstanding Dues
Check for any unpaid property taxes or fees. In Israel, the annual municipal tax (Arnona) on real estate must be paid by the property owner. Ensure that the Arnona (property tax), utility bills, and 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 a licensed appraiser or compare recent sales in the area to determine the value. Knowing the property’s worth helps set a realistic asking price and also factors into calculating capital gains tax, 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 you on pricing.
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 heavily in a home you plan to sell, addressing any glaring issues (like leaks or peeling paint) can prevent buyers from demanding significant discounts. Even simple steps, such as cleaning out clutter and staging the home, can help it sell faster and at a better price.
By taking care of these preparatory steps, you 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 or locksmith services 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? In most cases, yes. As a foreign-based owner, you have a couple of convenient options:
Power of Attorney (POA)
One of the most convenient options for selling your Israeli property from abroad is to grant an Israeli attorney at our firm a Power of Attorney (POA). This allows our attorney to handle all the sale documents and closing formalities on your behalf. The POA 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 POA, our lawyer can sign all necessary contracts and even the deed transfer for you, saving you the trip and ensuring a smooth process.
Signing at the 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 opt for this route, and we coordinate the process from start to finish.
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 crucial.
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 40 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 30-90 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 – usually in Israeli Shekels (ILS) – to you. Our firm can assist in safely transferring funds abroad by coordinating with your bank or a currency transfer service to obtain a fair exchange rate, ensuring that your funds are handled securely and efficiently.
Throughout this sales process, communication is key. We pride ourselves on keeping our clients updated at every step, whether by email, phone, or video call.
With offices and team members 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 logistics, it can genuinely be a hassle-free experience for you.
צור איתנו קשר עכשיוTax 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
First, the good news – 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 are typically subject to Capital Gains Tax (CGT) on any profit. The standard rate is 25% of the gain. The gain is the difference between the sale price and the property’s original purchase price (adjusted for inflation and improvements). Fortunately for inherited assets, the tax law treats the property’s value at the time of inheritance as the “purchase price” for you. This means any appreciation before you inherited is not taxed to you. You only pay tax on the increase in value from the date of inheritance to the date of sale.
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.
If you are not an Israeli resident, you cannot claim the full home-sale exemption, even if you hold Israeli citizenship. The practical result is that most foreign sellers should expect to pay the 25% capital gains tax on any increase in value. There are nuances – for example, if the deceased was your parent and this was their only home, or if you don’t own any other property anywhere in the world, you might qualify for partial relief. Each case is different.
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. We work with top Israeli tax advisors and leverage any applicable treaties or lesser-known provisions to keep your tax as low as legally possible.
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 of 50% on the increase in property value due to specific zoning 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, and the authorities want a cut when you sell.
Not every sale triggers a betterment tax – it only applies if such zoning 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
Since most of our clients are based in the U.S. or Canada, we remind them to consider their tax obligations in their home countries. The U.S., for instance, will tax you on the capital gain from selling foreign property (since the U.S. taxes its citizens on worldwide income).
The good news is that for U.S. tax purposes, inherited property receives a “stepped-up basis” to the value on the date of the previous owner’s death, which is essentially the same concept that Israeli law uses.
Therefore, you are unlikely to have a U.S. gain unless the property increased in value after you inherited it. Any gain above that date-of-death value will be subject to U.S. capital gains tax (typically 15-20% for long-term assets). You can usually claim a foreign tax credit on your U.S. return for the Israeli taxes paid, so you’re not taxed twice on the same income.
Canadian residents, similarly, must report the sale and pay capital gains tax in Canada, but Canada will honor the stepped-up basis and allow foreign tax credits.
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 from the Israeli side.
While Israel imposes no tax on inheriting property, selling it will involve capital gains tax and possibly betterment tax in Israel, as well as any taxes in your home country. With strategic planning by an experienced Israeli attorney, you can minimize the bite of these taxes. We ensure that the inheritance is registered correctly and apply for any available exemptions to prevent overpayment.
For example, Israeli law stipulates that if an heir already owns a home, the inherited property can still be sold tax-free in certain instances, provided it was correctly identified as an inherited asset and sold within a specific timeframe.
Details like these are why having knowledgeable legal advisors is invaluable. Our attorneys and tax experts will guide you through the filings with the Israel Tax Authority and obtain the required tax clearance for the sale.
Four Common Challenges and How We Can Solve Them for You
Selling an inherited property in Israel from abroad can present a few challenges beyond the standard transaction. Here are some common issues heirs face – and how we help our clients overcome them:
Multiple Heirs with Different Agendas
It’s common for Israeli properties to be inherited by several siblings or relatives together. What if one heir wants to sell but another is hesitant? Under Israeli law, each heir owns a share of the property, and generally, all co-owners must agree to sell the property. Disagreements can lead to legal disputes among heirs, which is something we strive to avoid.
Our approach is to mediate and find solutions that align everyone’s interests. Perhaps one sibling wants to keep the property – they could buy out the others’ shares. Or, if all heirs agree to sell but squabble over the price, we provide objective market data and legal guidance to bring consensus.
Only in rare cases is court intervention (a partition lawsuit) needed, and we can represent you in that as a last resort. This process of finding common ground can be a relief for many, and we are here to guide you through it.
However, with clear communication and the guidance of our experienced Israeli lawyer, most families can reach an amicable agreement. We ensure that each heir’s rights are protected throughout the sale process, and we can coordinate obtaining powers of attorney from multiple heirs worldwide to streamline the transaction.
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. Remember, until you register as the new owner, you technically shouldn’t lease it out.
We’ve encountered situations where heirs were unknowingly renting out a property that wasn’t legally in their name, which could cause issues later. Our team ensures that all legal loose ends are tied up, so you truly have control of the asset. We can also secure vacant homes by changing locks and handling any emergency repairs. Think of us as your local eyes and hands until the property is sold.
Legal and Language Barriers
Israeli law and bureaucracy can be bewildering if you’re not familiar with them. All official processes are conducted in Hebrew, from court orders to sale contracts. Misunderstanding a clause or missing a required form can be costly. That’s why engaging a bilingual Israeli attorney is critical.
Our firm not only handles the legal work, but we also ensure that everything is explained to you in English (or your preferred language). For example, if you receive an Israeli inheritance order or a purchase offer in Hebrew, we will translate and walk you through it line by line.
We want you to feel confident and informed, regardless of the distance. As one of our core values, we believe in educating clients on Israeli law – you’ll never be left in the dark about what’s happening.
Emotional Stress
Let’s not forget that selling an inherited home often comes with emotional weight. This might be the house you grew up in or a property your loved one cherished. Handling estate matters while grieving is challenging. We understand this deeply – our founder, Rahav Aharoni, has experienced the loss of his father and the subsequent estate process, which gives him personal insight into what clients are going through. Our team approaches each inheritance case with compassion and patience, providing a personal touch that can make a significant difference during these tough times.
We can proceed at a pace you’re comfortable with and take on the burdensome tasks so you can focus on your family. Many of our clients have noted how much they appreciate our “bedside manner” during tough times. We take pride in providing not just legal expertise, but human support.
In all these scenarios, the overarching solution is professional guidance and open communication. As the top-referred Israeli law firm in inheritance and real estate matters, the Aharoni Law Firm has seen and solved cases similar to yours. We combine legal know-how with practical problem-solving to remove obstacles. Our goal is that by the time the sale is complete, you feel that it was far easier than you ever expected, instilling a sense of confidence in our clients.
Why Choose Aharoni Law Firm to Handle Your Sale?
When it comes to selling inherited real estate in Israel, you’re not just dealing with a transaction. It’s a significant life event that intersects foreign law, family dynamics, and financial considerations. That’s why you need more than just a broker; you need a trusted legal partner. Here’s what sets Aharoni Law Firm apart and makes us the ideal choice for handling your sale.
Decades of Specialized Experience
We don’t dabble in multiple practice areas – we focus on Israeli estate, probate, and property law. With over 20 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, so you won’t have to educate your lawyer – we already speak the language of probate courts, tax officials, and land registrars.
Proven Results and Reputation
At Aharoni Law Firm, we’re trusted by hundreds 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, the UK, and beyond, consistently refer their friends and relatives to us – a testament to the positive outcomes and smooth service we provide. 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 and repatriating your funds, our firm manages the entire process seamlessly. This integrated approach not only saves you time and stress but also often saves you money by preventing costly mistakes or delays.
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, you’re not just a case number. Our Founder, Adv. Rahav Aharoni personally oversees every case our firm takes on. We assign a dedicated attorney (often Rahav himself) who will be your primary point of contact throughout the process. We take the time to listen to your story, understand your goals, and tailor our strategy to meet your needs. If you have questions or concerns at any stage, we are just a phone call or email away – and we respond promptly. We understand that trust is earned through effective communication and tangible results, so we never take your confidence in us for granted.
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 Secure and Smooth Sale of Your Inherited Property
Ready to turn your inherited property into a rewarding outcome? Don’t let the complexities of Israeli law or the miles between you and the property stand in your way. Aharoni Law Firm is here to handle the heavy lifting so that you can sell your inherited property with confidence and efficiency.
Imagine in a few months: the sales proceeds are safely in your bank account, the property is off your to-do list, and you’ve honored your loved one’s legacy by handling their estate responsibly. Our team would be honored to help you reach that point with peace of mind.
Contact us today to schedule a complimentary consultation. We’ll discuss your situation, answer all your questions, and outline a clear plan – with no obligation. As highly referred Israeli inheritance and real estate lawyers, we have the experience and passion to achieve the best possible result for you.
US/Canada Toll-Free: +1-888-923-0022
Israel: +972-3-9055478
דוא"ל: rahav@aharonilaw.com
Whether you’re in New York, Los Angeles, Toronto, 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 a Power of Attorney or sign documents at an Israeli consulate in your home country. 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.
We routinely handle sales for clients overseas through notarized documents and secure communication, saving you the time and expense of travel.
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, when selling, you will be subject to capital gains tax on any increase in value (see next question) and possibly a municipal betterment tax if applicable. It’s also important to ensure the property is registered as inherited appropriately, so that you maximize any tax benefits available to heirs. We will guide you through this to avoid unnecessary taxation.
How much is the capital gains tax on selling an inherited property in Israel?
The standard capital gains tax in Israel is 25% of the profit from the sale. The profit (gain) is generally calculated as the sale price minus the property’s value at the time you inherited it (plus any improvements you made).
Due to a 2014 law change, foreign non-residents typically cannot utilize the full exemption that Israeli residents sometimes receive, so you can expect to pay capital gains tax in Israel if the property value increases. Every situation is different, though.
Our firm will verify if you qualify for any exemption or reduced rate, and if not, strategize how to minimize your tax liability (we’ve often reduced foreign clients’ tax rates from 25% down to single digits through careful planning). We also handle the filing with the Tax Authority and obtain the required tax clearance for you before closing.
Will I owe taxes in the US (or my home country) after selling the property?
Likely yes, if you have a capital gain, but you won’t be double-taxed on the same income. In the U.S., for example, selling foreign real estate is subject to U.S. capital gains tax. The good news is that the U.S. will treat the inherited property’s basis as the fair market value at the date of the original owner’s death (just like Israel does).
This means if you sell reasonably soon after inheriting and at a price close to the inheritance-date value, you might have little or no U.S. taxable gain. Any gain above that stepped-up value would be taxed (15-20% typically), but you can usually claim a credit for the Israeli tax paid, which prevents double taxation.
Canada has a similar system. We always recommend consulting a local tax advisor to ensure the sale is reported properly. We will provide whatever Israeli documentation (valuation, tax paid, etc.) you need to satisfy your home country’s requirements.
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 a few months in straightforward cases, often around 2-3 months or more. More complex estates (e.g., those without a will or with family objections) can take longer, sometimes up to a year, but this is not the norm for most of our clients.
Once you have established the inheritance order, the sale process itself involves finding a buyer, signing a contract, and closing the transaction. In a hot market, you might find a buyer within weeks; in other cases, it could take a few months.
After you sign a sale agreement, expect another 6-8 weeks for closing (to allow for the buyer’s mortgage approval, title transfer, etc.). In total, from listing to closing, many sales are completed in roughly 3-6 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?
In practice, you need to have the inheritance order and title transfer completed (or nearly completed) before a sale can close. An Israeli title company or buyer’s lawyer will require proof that you indeed own the property or are about to own it. If a property isn’t transferred to the rightful heirs, it “cannot be sold” legally.
That said, it is sometimes possible to sign a sale contract with a buyer while the inheritance process is still underway, as long as the contract accounts for it, for example, making the closing conditional on you obtaining the probate order by a specific date. Many buyers (especially Israelis taking a mortgage) won’t sign until the title is clear, so it’s usually best to finish the inheritance registration first.
Rest assured, we focus on expediting the inheritance proceedings so that you can proceed to the selling stage sooner.
Do I need an Israeli lawyer to handle the sale?
Technically, you might attempt it without a lawyer, but it’s hazardous and not recommended, especially for overseas heirs. Israeli real estate transactions involve intricate laws (in Hebrew), mandatory legal filings, and significant sums of money – even many Israelis hire a lawyer for property sales.
For a foreign heir, an Israeli attorney is virtually indispensable for navigating the process and protecting your interests. A lawyer will ensure the inheritance is done correctly, draft and review the sale contract, secure all tax approvals, and prevent scams or mistakes. In our experience, the legal fee is a small price to pay for peace of mind, and often saves you money by avoiding pitfalls.
Our firm will handle every legal detail and keep you informed in English, ensuring a safe and straightforward experience for you. It’s our job to worry about the fine print so you don’t have to.
