Transferring an Apartment as a Gift in Israel: Transfer Without Consideration
Legal Representation in Transferring an Apartment Without Consideration (2026 Guide)
At a time when real estate is a central part of family wealth, transferring an apartment as a gift, or without consideration, between relatives has become an important legal and financial tool. These transactions allow a property to be transferred while using significant tax benefits, such as an exemption from betterment tax (mas shevach) and a reduction in purchase tax. This guide reviews the main rules, the conditions for the exemption and the relevant legislation, and explains how Adv. Emanuel Trach, lawyer and notary, can help.
What Is a Transfer of an Apartment as a Gift?
The gift transaction: the basic definition
A transfer without consideration is a gift transaction in which the giver transfers his rights in a property to a relative without receiving payment or any other benefit. It usually takes place between parents and children, between siblings or between spouses, and comes with tax benefits and legal reliefs designed to make transfers within the family easier.
Documents required
To carry out such a transfer lawfully, several documents are needed:
- Giver’s affidavit: the giver declares that he is transferring his rights in the property without consideration.
- Recipient’s affidavit: the recipient confirms receiving the rights without consideration.
- Related agreements: for example, agreements regulating the cooling period or undertakings regarding use of the property (such as a right of residence for the parents).
The documents must be signed and filed with the authorities so that the transaction is properly registered at the Land Registry (Tabu) and reported to the Israel Tax Authority.
The Main Legal Rules
The Real Estate Taxation Law (Betterment and Purchase), 5723-1963 is the basis of real estate taxation in Israel:
- Section 62 sets the conditions for exemption from betterment tax on a transfer of rights in real estate without consideration between relatives.
- Other provisions define how the value of the property is determined on purchase and sale.
The Real Estate Taxation (Purchase Tax) Regulations set the purchase tax rates. On a gift between relatives, the recipient pays a reduced purchase tax, generally one-third of the regular tax, and a transfer of a residential apartment between spouses living together is generally exempt from purchase tax.
Cooling periods
To prevent tax planning abuse, the law sets cooling periods during which a sale by the recipient affects the tax calculation:
- 3 years if the recipient lives in the apartment.
- 4 years if the recipient does not live in the apartment.
Selling the property within the cooling period may lead to a higher betterment tax liability.
Tax Benefits
Exemption from betterment tax
Betterment tax is levied on the gain, the difference between the purchase price and the sale price. On a transfer without consideration, if all conditions are met, the transfer is exempt from betterment tax. The conditions include:
- The transfer must be between relatives (as defined in the law, including spouses, parents, children, grandchildren and siblings).
- The parties must sign affidavits confirming there is no consideration.
- The transaction must be reported to the Tax Authority within 30 days, and any tax due paid within the statutory deadline.
Reduced purchase tax
- A transfer between spouses or first-degree relatives leads to reduced purchase tax, often only one-third of the regular tax.
- These reliefs allow efficient tax planning, reducing costs and making it easier to keep the property within the family.
How Purchase Tax Is Calculated
Purchase tax in Israel is progressive, and the rate depends on several factors:
- Whether the property is a single apartment or an additional one.
- The value of the property.
- The buyer’s personal situation (for example, whether he owns another property).
A person who receives an apartment as a gift from a relative may pay only one-third of the regular tax, a significant saving compared with buying an additional apartment. On a future sale, betterment tax will be calculated according to the rules that apply after the cooling period.
How Adv. Emanuel Trach Can Help
Adv. Emanuel Trach, lawyer and notary, represents clients in complex real estate transactions in Tel Aviv, Ramat HaSharon and the Center region, with in-depth knowledge of real estate taxation and close familiarity with the local authorities.
Our services
- Comprehensive legal advice: a detailed explanation of the law and current regulations, and an assessment of the risks and benefits of the transaction.
- Preparing documents: drafting affidavits, related agreements and reports to the Tax Authority.
- Dealing with the authorities: coordination with the municipality, the Land Registry and the Tax Authority to obtain the required approvals.
- Tailored tax planning: using the available benefits to minimize tax costs.
- Representation in disputes: if disputes arise in the future, we represent the client’s rights in full.
Practical Example: Transferring an Apartment as a Gift
A father who owned a single residential apartment decided to give it to his adult son, so that the son could benefit from tax reliefs and the transfer would take place smoothly and without future disputes.
Initial consultation: Adv. Trach explained the process, the possible tax benefits and the legal risks, and reviewed all the details, including the value of the apartment, the purchase date and the market situation.
Preparing the documents: the giver’s and recipient’s affidavits were prepared, together with an agreement setting out the terms of the transfer, including the cooling period (3 years if the son lives in the apartment).
Coordination with the authorities: the required reports were filed with the Tax Authority and the Land Registry within the statutory deadlines, and the necessary approvals were obtained.
Completion: the property was registered in the son’s name and all documents were properly recorded.
The benefits achieved:
- Tax savings: the transfer was exempt from betterment tax and purchase tax was reduced.
- Legal certainty: all documents were prepared professionally, leaving no room for conflicting interpretations.
- Family planning: the property stayed within the family, reducing the risk of disputes when the estate is divided.
Summary
Transferring an apartment without consideration is not only a symbolic gift within the family but also an efficient tax-planning tool. It requires careful planning, compliance with all legal requirements and correct reporting to the authorities. Professional legal support ensures a smooth process, prevents mistakes and provides legal and financial certainty.
If you are planning to transfer an apartment as a gift, contact Adv. Emanuel Trach for personal advice, from the first consultation to registration at the Land Registry. See also: wills and inheritance.
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