Selling an inherited apartment in Israel is a transaction where three worlds meet: inheritance law, real estate law and tax law. The heirs first need to prove they are the heirs, then decide together what to do with the apartment, and only then choose the right way to sell it without paying unnecessary capital gains tax (mas shevach). The costly mistakes we encounter usually happen not in the negotiation with the buyer, but in the stages before it: an order that was not obtained in time, a division between siblings done in a way that creates a tax liability, or a mistaken assumption that the exemption “comes automatically”. In this guide we have set out the right sequence of steps, the rules worth knowing and the points where it is wise to pause and seek advice.
Inheritance order or probate order: the starting point of every sale
As long as the heirs do not hold an order, they cannot prove to the Tabu, to the Israel Tax Authority or to a buyer that the rights in the apartment have passed to them. The first step is therefore always the order, and there are two kinds:
- An inheritance order (tzav yerusha) is issued when the deceased left no will. The estate is divided under the Succession Law: when there is a spouse and children, the spouse usually inherits half of the estate and the children share the other half equally. Remember that when the apartment was registered in the names of both spouses, only the deceased’s share forms part of the estate, and the surviving spouse’s share remains theirs.
- A probate order (tzav kiyum tzava’a) is issued when there is a will. The will determines who inherits and in what share, and sometimes states explicitly who receives the apartment. The will may also appoint an estate administrator.
The application is filed with the Registrar of Inheritance Affairs, online or on paper. As of 2026, the fee for opening a file is ₪507 for an online application and ₪597 for a paper application, plus a publication fee. The application is published to allow objections to be filed, so even in a simple case the order is usually granted after several weeks rather than several days. The fees are updated every year, so it is worth checking the current amount on the Registrar’s website before filing.
When an objection has been filed, or when the validity of the will is disputed, the case moves to the Family Court and the timeline changes completely. This is the moment to postpone any conversation with buyers until the legal picture becomes clear.
Estate administrator: who signs the contract
If the court or the Registrar has appointed an estate administrator, the sale is not carried out by the heirs’ signatures alone. In such cases, Section 97 of the Succession Law requires prior court approval for transferring real estate out of the estate. In practice this adds a stage to the process, so a contract with a buyer should include a suitable condition precedent and a timeline that takes the approval into account.
Registering the inheritance at the Tabu, and selling before registration
The order by itself does not change what is written in the Tabu extract. To have the rights registered in the heirs’ names, you file an application to register the inheritance at the Land Registry, or you indicate already in the online order application that you want the real estate rights registered, so no separate application is needed. When the apartment is not registered at the Tabu but with a housing company or the Israel Land Authority, the registration is done with them, and it is worth starting early there because each body works at its own pace.
A question that comes up in almost every family is whether the apartment can be sold before the inheritance is registered. The answer is yes, provided there is an order. The Real Estate Taxation Law provides that the sale of an apartment still belonging to the estate is treated as a sale by the heirs themselves, and that is also how it is reported to the Tax Authority. At the Tabu, the inheritance and the transfer to the buyer can be registered in sequence, and the transaction lawyer coordinates both stages. What cannot be done safely is signing a binding contract before the order has been issued: a careful buyer and their lawyer will not agree to pay significant money to someone who has not yet proven ownership.
Before advertising the apartment, it is worth obtaining an updated Tabu extract and checking that there is no active mortgage, old cautionary note, attachment or unrenewed lease on it. The deceased’s mortgage does not disappear upon death, and the bank will ask to see the order in order to release the lien out of the sale proceeds.
Capital gains tax on an inherited apartment in Israel: stepping into the deceased’s shoes
Receiving an apartment by inheritance is not a “sale” under the Real Estate Taxation Law, so neither capital gains tax nor purchase tax (mas rechisha) is paid on the passage from the deceased to the heirs. The question arises only when the heirs sell. Here a fundamental principle applies: the heir steps into the shoes of the deceased. The purchase date of the apartment is the day the deceased bought it, and the purchase value is the value that would have been set for the deceased. This means the gain is measured from the original purchase, which sometimes took place decades ago, so without an exemption the liability can be very high. We explained the general calculation principles in our guide to capital gains tax (mas shevach), and here we focus on what is specific to inheritance.
The four conditions for the exemption when selling an inherited apartment
Section 49B(5) of the law grants an exemption from capital gains tax on the sale of a residential apartment received by inheritance when all of the following conditions are met together:
- The seller’s identity: the seller is the spouse of the deceased, a descendant, or the spouse of a descendant. Another heir, for example a sibling, a nephew or a friend named in the will, does not benefit from this exemption.
- One apartment only: before their death, the deceased owned only one residential apartment.
- The “had they been alive” test: had the deceased sold the apartment themselves, they would have been entitled to an exemption on its sale.
- A qualifying residential apartment: the apartment meets the definition of a residential apartment under the law.
Two things make this exemption particularly powerful. First, it is assessed according to the deceased’s situation and not the heir’s, so an heir who owns apartments of their own can still benefit from it. Second, the exemption does not “use up” the heir’s personal exemptions, and the heir can still sell their own apartment in the future under the regular rules.
Where the exemption fails
The second condition is where many families are surprised. The courts have held that it is enough for the deceased to have held a share in another apartment, even a small share they themselves inherited from their parents or siblings, to deny the exemption. So before assuming the sale is exempt, check the Tabu extracts and the Tax Authority’s databases for all the rights registered in the deceased’s name. The exemption may also fail when the deceased sold another apartment under an exemption shortly before their death, because then they themselves might not have met the conditions of the single home exemption.
The exemption ceiling
The single home exemption is limited by a value ceiling. The ceiling stands at ₪5,008,000 and is frozen at that amount until January 15, 2028. When the sale price exceeds the ceiling, the proportional part of the gain attributed to the value above the ceiling is taxable. In north Tel Aviv, Ramat Aviv, Tzahala and parts of Ramat Hasharon this is not a theoretical question: large apartments and private houses easily exceed the ceiling, so it is wise to ask a tax advisor for a preliminary calculation even before setting an asking price.
When the exemption does not apply
If the conditions of Section 49B(5) are not met, that still does not mean the full tax is due. Each heir examines their own routes:
- The personal single home exemption: an heir for whom the inherited apartment is their only apartment may meet the conditions of the regular exemption. In addition, the law provides that a share of no more than half in an inherited apartment is not considered an additional apartment of the heir for the purpose of the exemption on their own home, and the same applies to an apartment received from a deceased who held only one apartment.
- Preferential linear calculation: for a residential apartment, the gain is split by periods. The gain attributed to the period up to the end of 2013 is exempt, and the gain attributed to the period after it is taxable, usually at a rate of 25% of the real gain. When the deceased bought the apartment decades ago, most of the holding period falls before 2014, and the actual tax is far lower than it may seem at first glance.
The right route can differ from heir to heir within the very same transaction. This is exactly the point at which an accountant or a lawyer specializing in real estate taxation should review the specific case.
Purchase tax: what changes for the buyer, and what changes for the heirs
From the buyer’s perspective, the fact that the sellers are heirs changes nothing. Purchase tax is determined by the buyer’s own situation: whether this is their only apartment, whether they are upgrading their home, and whether they are an Israeli resident. A buyer worried that a deal with heirs is “more complicated” from a tax standpoint can relax; the only things that complicate it are the absence of an order or a dispute among the heirs.
For the heirs, there is an implication in the opposite direction: the inheritance may affect their status as future buyers. Under the rules, an heir whose share in an inherited apartment is no more than half can still be considered the owner of a single apartment for purchase tax purposes when buying an apartment. Anyone planning to buy an apartment while the family apartment has not yet been sold should check their position in advance. We covered this in more detail in our article on who is considered an apartment owner.
Dividing the proceeds among the heirs
When all the heirs sell together to an outside buyer, each of them is a seller according to their registered share, reports to the Tax Authority according to that share and receives their share of the proceeds. Deductible expenses, such as legal fees, brokerage fees and expenses related to the gain, are divided in the same proportion.
The trap actually lies in a division within the family. A division of the estate in which each heir receives a different asset, for example one receives the apartment and another receives savings or another asset of the estate, is not considered a sale. By contrast, when one heir pays their siblings from private funds to buy their shares, that transfer is a sale in every respect: the selling siblings may be liable for capital gains tax, and the buyer for purchase tax. Properly planning the division agreement, before making any commitment, can save significant amounts.
It is also important to distinguish between the actual proceeds and the registration. If one of the siblings paid the building committee fees and arnona for years, or renovated the apartment before the sale, that accounting is settled between them in a written agreement. It does not change the division with respect to the buyer or the report to the Tax Authority, so it is best to settle it before signing the sale contract.
When the heirs disagree, and when some of them live abroad
Selling an entire apartment requires the signature of all the owners. When one of the heirs objects to the sale, the price or the timing, the options are an attempt to mediate and reach agreement, a purchase of their share by the others, or a court application for dissolution of co ownership (pirok shituf). Dissolution of co ownership is a separate procedure with its own rules, and we detailed it in our guide to dissolution of co ownership of an apartment. In our experience, presenting objective data, such as a valuation based on actual transactions, often brings together positions that seemed far apart.
Heirs living abroad are common in families from north Tel Aviv and the Sharon region. They sign the same documents as any other heir, and their lawyer in Israel should coordinate in advance the manner of signing, the required authentication and the timelines, so that their signatures do not delay the transaction. The Registrar of Inheritance Affairs makes it possible to obtain a digital copy of the order with an apostille stamp as well, for use outside Israel. An heir who is not an Israeli resident for tax purposes should check with a tax advisor how their status affects their personal exemptions, the reporting and the transfer of funds to them.
Preparing an inherited apartment for sale
An apartment that passes by inheritance is usually one that was lived in for many years, and it often stands empty for months until the family is ready to act. The right preparation begins with emotion and continues with details:
- Clearing out belongings: decide in advance what each heir takes, and clear the apartment before the photographs. An apartment full of personal belongings tells buyers “someone’s home” rather than a home they can picture themselves in.
- To renovate or not: in most cases a full renovation before the sale is not worthwhile. Painting, repairing dampness and leaks, replacing light fixtures and a thorough cleaning pay for themselves. A heavy renovation is a decision best made only after checking the price gap within the same building. More ideas appear in our article on preparing your home for buyer viewings.
- Running payments: arnona, building committee fees, electricity and water keep accumulating. The municipal certificate for transferring the rights will not be issued while there is a debt, so settle the bills early.
- Documents: a Tabu extract, the registered floor plan and permit plans from the building file, and any document on building additions. Buyers in north Tel Aviv check for building violations carefully, and a gap between the situation on site and the permit may hurt the price.
- Planning potential: in older buildings in Ramat Aviv, Neve Avivim and other parts of the neighborhoods of north Tel Aviv, an urban renewal plan in progress strongly affects the value. It is worth finding out the status of the project before setting a price.
A numerical example: selling an inherited apartment in Ramat Aviv Gimel
The example is for illustration only, and the figures are not based on an actual transaction.
A woman and her husband bought a four room apartment in Ramat Aviv Gimel in 1988. The husband passed away years ago, and his share was registered in her name by inheritance. She passed away in 2025, without a will, and this was the only apartment she owned. Her three children inherit under an inheritance order, one third each. One of the daughters owns an apartment of her own in Herzliya, and another son lives abroad.
The children sell the apartment for ₪4,200,000. They check the conditions: the sellers are descendants, the mother owned only one apartment, and had she sold it herself she would have been entitled to the single home exemption. The price is below the exemption ceiling of ₪5,008,000, so the entire sale is exempt from capital gains tax. Each of the children receives about ₪1,400,000 before expenses, and the daughter who owns an apartment in Herzliya does not compromise the exemption on her own home.
Now let us change one detail: suppose the mother had inherited a quarter of an apartment in Bat Yam from her brother and never sold it. In that situation the one apartment only condition is not met, and the exemption under Section 49B(5) is denied to all the children. Each of them will examine their own routes: whoever has no other apartment may qualify for the personal exemption, and the others will be assessed under the preferential linear calculation. Since the apartment was bought in 1988, most of the gain is attributed to the period before 2014 and is exempt, and the tax will apply to the proportional part attributed to the years after it. A quarter of an apartment that nobody remembered changes the entire outcome here.
Selling an inherited apartment in Israel, step by step
| Stage | What to do | Note |
|---|---|---|
| 1. Gathering information | Tabu extract, the will if there is one, a list of all the deceased’s assets | Check whether the deceased held a share in another apartment |
| 2. Applying for an order | Inheritance order or probate order with the Registrar of Inheritance Affairs | Fee of ₪507 for an online application, as of 2026 |
| 3. Agreement among the heirs | Decision to sell, a minimum price and a written division agreement | A payment between heirs from private funds may be considered a sale |
| 4. Preliminary tax review | Checking the inherited apartment exemption, the exemption ceiling and the alternative routes | Each heir checks their own position separately |
| 5. Preparing the apartment | Clearing out, repairs, settling arnona and building committee debts | Heavy renovation only after a cost benefit check |
| 6. Valuation and marketing | Setting a price based on actual transactions and structured marketing | A price above the ceiling requires an additional tax calculation |
| 7. Sale contract | Signature by all the heirs or by the estate administrator | Court approval is required when an estate administrator has been appointed |
| 8. Reporting to the Tax Authority | Declaration and exemption request within 30 days of the sale | Tax payment, if due, within 60 days |
| 9. Registration | Registering the inheritance and transferring the rights to the buyer | Tax certificates and a municipal certificate are required |
Frequently asked questions
Can an inherited apartment be sold without an inheritance order?
No. Without an inheritance order or a probate order there is no way to prove the heirs are the owners, and the buyer will not be able to register the apartment in their name. You can start preparing the apartment and checking prices while waiting for the order, but signing a binding contract before the order is issued exposes all parties to risk.
Must the inheritance be registered at the Tabu before the sale?
Not necessarily. A sale of an apartment still belonging to the estate is considered a sale by the heirs, and the registration of the inheritance and the transfer to the buyer can be carried out in sequence. What you must have in hand is the order.
Does an heir who owns an apartment of their own get the capital gains tax exemption?
Yes, if the conditions of the inherited apartment exemption are met. The exemption is assessed according to the deceased’s situation and not the heir’s, so an heir who is a spouse, a descendant or the spouse of a descendant can benefit from it even when they own other apartments.
What happens when one of the heirs does not agree to sell?
You can try to reach agreement, buy their share, or apply to the court for dissolution of co ownership. Each route affects the price, the timeline and the tax differently, so it is wise to consult a lawyer before choosing.
Does the buyer pay higher purchase tax when the sellers are heirs?
No. The buyer’s purchase tax is determined solely by their own situation. The fact that the apartment came to the sellers by inheritance does not change their tax calculation.
How long does the whole process take?
In a simple case, with no objections, the order is usually granted after several weeks, and the sale itself takes as long as any other sale. An objection to the order, a dispute among heirs or an estate administrator lengthen the path significantly.
Guidance when selling an inherited apartment in Israel
Selling an inherited apartment requires combining precise legal and tax work with the right marketing of the property. At RS Nadlan we accompany families and heirs in north Tel Aviv, Ramat Hasharon and the Sharon region with valuation, preparing the apartment and marketing, in coordination with their lawyers and tax advisors. We do not provide legal or tax advice, and your case should be reviewed by the appropriate professionals. If you would like to talk about the family apartment, you can contact us or call us at 077-500-4600 (+972 77 500 4600 from abroad), and we will be happy to help.
