Inheritance of Israeli Property by US Heirs
Inheritance of Israeli Property by US Heirs
It is common for American families to inherit an apartment in Israel, perhaps from parents who made aliyah, grandparents who stayed or a relative who invested there. US probate documents do not transfer Israeli real estate by themselves. The heirs need an Israeli inheritance order or probate order, and only then can the property be registered in their names, sold or rented. At the same time, the US side may involve estate tax and basis questions. This guide sets out the process in general terms so heirs know what to expect. It is not legal or tax advice, and every family's situation differs.
Israeli Orders Are Required
To deal with Israeli real estate, heirs must obtain either an inheritance order, if there is no will, or a probate order, if there is a valid will. Applications are submitted to the Registrar of Inheritance Affairs and, in contested cases, handled by the family court.
A will made in the United States may be recognized in Israel if it meets the relevant requirements, but it must still go through the Israeli probate process. An Israeli lawyer will advise on the documents needed, which usually include apostilled death certificates.
Which Law Applies
Israeli succession law contains rules on which country's law governs an estate, often linked to the deceased's domicile. For an American who lived in the United States, questions of foreign law may arise, and expert opinions on that law may be needed.
This is one reason advisers often suggest a dedicated Israeli will for Israeli assets, drafted in harmony with the documents your US estate attorney prepared.
Registering the Heirs
Once the order is issued, heirs can register the property in their names at the Land Registry, or at the Israel Land Authority or developer records if the rights are recorded there. The registration reflects each heir's share.
Transfer by inheritance is generally not subject to purchase tax, but reporting requirements to the Land Taxation office still apply.
Apostilled death certificate
US will or estate documents, if relevant
Israeli inheritance or probate order
Registry extract and tax reporting forms
Identification of every heir
The US Estate Picture
Israel does not currently levy an estate or inheritance tax. In the United States, the estate of a US citizen or resident may be subject to federal estate tax on worldwide assets, including Israeli real estate, depending on its size and applicable exemptions. Some states have their own estate or inheritance taxes.
For income tax purposes, heirs often receive a basis in inherited property based on its value at the date of death. Obtaining a professional valuation of the Israeli property at that time helps both the estate and the heirs later.
Keeping, Renting or Selling
Heirs must decide together what to do with the property. Keeping it jointly requires a co-ownership arrangement. Renting it out creates Israeli and US tax reporting. Selling may be eligible for certain Israeli capital gains reliefs available to heirs, subject to conditions.
If heirs disagree, any of them can ask an Israeli court to dissolve the co-ownership, which may result in a court-supervised sale. Talking early and agreeing on a plan usually preserves more value.
Practical Steps for Heirs Abroad
Appoint one Israeli lawyer to handle the order and registration for all heirs, with each heir signing a power of attorney. Secure the property, pay ongoing charges such as property tax and insurance and check whether any urban renewal agreements were signed by the deceased.
Keep a shared record of expenses and decisions so that all heirs remain informed.
Frequently asked questions
Can a US probate court order transfer the Israeli apartment
No. A US order may support the Israeli application, but Israeli real estate is transferred on the basis of an Israeli inheritance or probate order.
Does Israel tax inherited property
Israel does not currently impose an estate tax, and inheritance transfers are generally exempt from purchase tax. Later sales or rentals by heirs can be taxable, so take advice.
How long does the Israeli process take
Uncontested applications are often handled within months, while contested cases or those involving foreign law can take considerably longer.
Should my parents make an Israeli will
Many advisers recommend it for those who own Israeli property, as it can simplify the process. It should be coordinated with the US estate plan to avoid conflicts.
Elkayam Group
As a family business now in its third generation, grown from roots in the forties, Elkayam Group understands how property passes between generations. The Rival Street 37 office in Tel Aviv operates in Hebrew, English and French and guides American heirs through their options for an inherited Israeli property, including renewal potential and sale.
Inherited property in Israel and not sure where to begin. Our team can help you map the next steps.
+972-53-658-4252 · support@kobielkayamrealestateltd.com · Rival St 37, Tel Aviv