Purchase tax on a gifted apartment in israel

When an apartment in Israel is transferred as a gift, the transaction is still considered a real estate transfer under Israeli law, and therefore purchase tax applies even though no money changes hands. The taxation rules depend on the relationship between the donor and the recipient, the classification of the property, and the beneficiary’s residency status. In transfers between close family members the law often grants reduced purchase tax rates, but these benefits are not automatic. The recipient must report the gift to the Israel Tax Authority, prove the family relationship, and submit all required documents to secure the reduced rate.

In most cases a gifted apartment is taxed based on the standard residential purchase tax brackets unless the beneficiary qualifies for the family transfer benefit. Close family members such as parents, children, spouses and certain additional relationships may be eligible to pay reduced purchase tax even though the apartment is transferred without consideration. However if the recipient already owns other properties or is classified as a foreign resident the tax rate may be higher. Every gifted property must be reported within a strict statutory deadline and the tax authority may request further documentation to confirm eligibility for the reduced rate.