requires the heirs to obtain either an Inheritance Order (no will) or a Probate Order (valid will) from the Registrar of Inheritance Affairs under the Inheritance Law (1965), followed by formal registration of the transfer at the Land Registry (Tabu). The process involves court filings, a tax clearance certificate from the Tax Authority, and verification of any encumbrances on the property. The inheritance transfer itself is exempt from capital gains tax; however, a subsequent sale by the heir may be taxable. The Law Office of Adv. & CPA Shoshi Arbib handles the complete apartment inheritance process from court filing to Land Registry registration.
Inheriting a Residential Apartment — What You Need to Know
A residential apartment is typically the most valuable asset in an Israeli estate, and transferring it to heirs requires the appropriate court orders — either an Inheritance Order or a Probate Order — together with formal registration at the Land Registry (Tabu). The process involves court filings, tax clearance certificates, and verification of any existing mortgages or liens under the Inheritance Law (1965). The Law Office of Adv. & CPA Shoshi Arbib handles the complete apartment inheritance process, from initial court filings through to final Land Registry registration.
Inheritance Order vs. Probate Order
When the deceased left no will, the heirs apply to the Registrar of Inheritance Affairs for an Inheritance Order — a formal document that identifies the legal heirs and their proportionate shares under Israel's Inheritance Law (1965). Without this order, the Land Registry will not transfer ownership of the apartment, and banks will not release the deceased's accounts. The Inheritance Order also establishes who has authority to manage the estate during administration. Processing typically takes two to six months when there are no objections from other parties.
When a will exists, the heirs apply to the Registrar of Inheritance Affairs for a Probate Order — a formal ruling confirming the will's legal validity and authorising the named executor to administer the estate. Under Israel's Inheritance Law (1965), the Registrar may require the original will, the death certificate, and identification of all beneficiaries. The Law Office of Adv. & CPA Shoshi Arbib prepares and files Probate Order applications and represents estates before the Registrar of Inheritance Affairs and the Family Court.
Required Documents
- Death certificate of the deceased
- Identity documents of all heirs
- Property documents (current Land Registry extract)
- The will (if one exists)
- Declarations by the heirs
Capital Gains Tax Exemption
Inheriting a residential apartment in Israel is generally not subject to capital gains tax at the point of receipt — the transfer itself is a tax-exempt event under the Real Estate Taxation Law. However, when the heir subsequently sells the inherited apartment, capital gains tax may apply, calculated on the difference between the original purchase price paid by the deceased and the sale price at time of sale. Whether the heir qualifies for the single-apartment exemption depends on their overall property holdings at the time of sale and must be assessed individually.
Step-by-Step Process for Inheriting an Apartment
- Filing the petition — Submit an application for an Inheritance Order or Probate Order to the Registrar of Inheritance Affairs, together with all required documents.
- Publication period — The Registrar publishes notice in the Official Gazette. A waiting period follows to allow creditors and potential objectors to come forward.
- Receiving the order — Once the Registrar is satisfied, the Inheritance or Probate Order is granted. This is the legal basis for transferring the property.
- Transfer at the Land Registry (Tabu) — The order is used to register the apartment in the names of the heirs at the Israel Land Registry. This completes the transfer of title.
When There Are Multiple Heirs
When several heirs inherit a single apartment together, they become co-owners as tenants in common. Each holds an undivided share. This can create practical difficulties — no heir can sell or mortgage their share without all co-owners' agreement (or a court order). In these situations, a written agreement between the heirs regarding use and future disposition of the property is strongly advisable.
Tax Considerations When Inheriting an Apartment
- Capital gains tax (Mas Shevach) — Not owed at the point of inheritance. However, if the inherited apartment is later sold, the heir may owe capital gains tax on appreciation that accumulated from the original purchase date, not just from the inheritance date.
- Purchase tax — Heirs generally do not pay purchase tax on inherited apartments under the Taxation of Real Estate Law.
- Betterment levy — If the apartment benefits from an approved zoning change that increased its value, a betterment levy may be payable to the local authority upon sale or permit application.
What is the difference between an inheritance order and a probate order in Israel?
An Inheritance Order is issued by the Registrar of Inheritance Affairs when someone dies without a valid will (intestate), formally confirming the legal heirs and their respective shares under the Inheritance Law (1965). A Probate Order is issued when a valid will exists, confirming the will's legal validity and authorising the executor to administer the estate according to its terms. Both orders are prerequisites for transferring real estate at the Land Registry and releasing the deceased's bank accounts. The Law Office of Adv. & CPA Shoshi Arbib prepares and files both types of applications.
Is capital gains tax owed when inheriting an apartment in Israel?
Under Israeli law, the inheritance transfer of an apartment is a capital-gains-tax-exempt event — no tax is owed at the moment of receipt. However, when the heir later sells the inherited apartment, capital gains tax may apply, calculated from the original purchase price paid by the deceased to the sale price at time of sale. Whether the heir qualifies for the single-apartment exemption depends on their total property holdings and personal circumstances at the time of sale. Tax planning before any sale is strongly recommended.
Official References: Israel Ministry of Justice — Succession · Israeli Courts Administration · Israel Land Authority · National Insurance Institute of Israel · Israel Tax Authority
Shoshi Arbib Law Office — Attorney | CPA | Mediator, Netanya, Israel.
