Tax issues, related to inherited property can be considered in the light of acquiring inherited property, as well as of subsequent sale or exchange of the inherited property. Answers to these questions can be found in the Personal Income Tax Act (PITA) and the Local Taxes and Fees Act (LTFA).
Acquiring a property as heritage
Inherited property is subject to inheritance tax, according to LTFA. However, the surviving husband and straight-line heirs do not owe such tax without limitations.
Inherited property is not considered an income, i.e. it is not subject to taxation under PITA.
Sale or exchange of inherited property
Sale or exchange of inherited property does not fall in the scope of LTFA, unless it is related to vehicle or real estate, in which case, tax on acquiring properties for consideration.
Under PITA, the received income from sale of inherited property is not considered as a taxable income and is not subject to personal taxation.