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Taxes

Below are selected readers' questions on 'Taxes' ,that we have chosen to answer. Further and more detailed information can be found on our main website, at:

  • http://www.family-laws.co.il/other-topics-taxation-exemptions
  • http://www.family-laws.co.il/other-topics-taxation-acquiring-property
  • http://www.family-laws.co.il/other-topics-taxation-transferring-property
    • How is tax calculated when a property that is inherited is sold?

    Like any sale, sales tax and property appreciation tax is due, in principle. If the person from whom the property was inherited  died before 1.4.81 then, for property appreciation tax purposes,  what counts is the value of property when the person passed away . If,however, he died after 1.4.81 ,the person inheriting the property steps into his shoes, and the value is calculated as the original value, when the bequeathor acquired it.

    I have inherited an apartment in my father's will. Do I have to pay tax on this?

    Inheritance is not regarded as a sale for the purposes of real estate taxation , so  no you will not have to pay tax when you inherit it. Tax will be due when if you sell it.

    Is tax due on the transfer of rights in the family home from one spouse to another as part of their divorce agreement?

    No! The transfer of property rights as part of a court authorised divorce agreement is not regarded as a 'sale' for the purposes of the Land Taxation Law of 1963. Accordingly, the exemption is exempt from tax.

    If I sell an apartment I own, and then three years later inherit my parent's home, and sell it, will I be entitled to any exemptions on the second sale?

    In principle, no, because there is an exception only once every four years from property appreciation tax to be levied from the seller, assuming that this was due on the second sale.

    Does inheritance tax exist in Israel?

    No!