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Court Upholds Tax Authority's Demand for Higher Purchase Tax on Grandfather's Property Gifts to Grandchildren
An Israeli court ruled that 12 apartments bought by a grandfather for his minor grandchildren are subject to higher purchase tax, treating them as additional family properties rather than sole residences.
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What happened
- 01Grandfather must pay 2.5 million shekels more in purchase tax on 12 apartments for grandchildren.
- 02Court ruled apartments are additional family properties, not sole residences of grandchildren.
- 03Apartments bought in Ramat Gan for about 3.5 million shekels each and rented out, not used as homes.
- 04Family unit presumption treats parents and minor children as one for purchase tax purposes.
- 05Court recognized intent to gift real assets but ruled usage as investment overrides tax benefits.
- 06Decision impacts future capital gains tax, possibly removing benefits for grandchildren.
The decision, based on the family unit principle, requires the grandfather to pay about 2.5 million shekels more in tax and may affect future capital gains tax benefits.
The coverage
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