How to Dissolve Property in Israel
Dissolution of Co-Ownership Lawyer for Co-Owners and Heirs in Israel and Abroad
Dissolving property in Israel means ending its co-ownership, either by agreement between the co-owners or by a court order that divides the property or sells it and splits the proceeds. Israeli law does not lock anyone into joint ownership: not heirs who inherited an apartment with siblings who will not sell, not former spouses, and not partners in an investment. Adv. Reut Eliyahu of Eliyahu & Co. reviews the Land Registry record, tells you which route fits your property, and handles the process in English, for co-owners and heirs in Israel and abroad.
For co-owners in Israel (English-speaking owners, olim, former spouses, partners) and co-owners abroad, including heirs who share an inherited apartment with relatives in Israel.
How Do You Dissolve Property Co-Ownership in Israel?
To dissolve property in Israel, a co-owner sends the other co-owners a written demand and, if they do not agree, files a claim for dissolution of co-ownership. Under Section 37(a) of the Land Law, 5729-1969, any co-owner may do this at any time, whatever their share; without an agreement, the court divides the property or orders it sold.
- Agreement (Section 38(a)): the co-owners agree on a sale, a buyout or a division.
- Partition in kind (Section 39): physical division, with balancing payments where needed.
- Condominium registration (Section 42): a building registered as separate units.
- Sale and division of proceeds (Section 40): court-ordered sale, proceeds split by share.
Your Right to End a Co-Ownership in Israel
Under Israeli law, no co-owner can be forced to stay a co-owner. Each one may demand dissolution of the co-ownership at any time, and the other co-owners cannot block it by refusing. Section 37(a) of the Land Law, 5729-1969 (in Hebrew) sets no minimum share, so the owner of a small part of an apartment has the same right as the owner of most of it. What the other co-owners can generally influence is how the co-ownership ends, not whether it ends; courts have refused or delayed a dissolution only in rare cases of bad faith or abuse of right. Dissolution of co-ownership is called piruk shituf in Hebrew; in English it is also described as partition of co-owned property, or simply as dissolving or splitting a jointly owned property.
The law first lets the co-owners agree (Section 38(a)). Only where they do not is the matter decided by the court, which chooses among the methods in Sections 39 to 43: a physical division, a registration of the building as separate units, or a sale and division of the proceeds. A co-ownership agreement can limit the right for a period. Under Section 37(b), however, if a clause bars dissolution for more than three years, the court may still order dissolution once three years have passed, if it finds this just in the circumstances.
Eliyahu & Co. is a civil, commercial and real estate law office in Herzliya Pituach. Adv. Reut Eliyahu handles each dissolution herself, from the first look at the register to the final division of the money. For purchases, sales and the full range of property work, see our Israeli real estate lawyer page.
The Same Process, Two Kinds of Clients
🏠 Co-Owners Living in Israel
- Meetings at our Herzliya Pituach office, by Zoom or by phone, in English, Hebrew or Spanish.
- The Land Registry extract, the other side's letters and every court document explained in plain English.
- A realistic view of a buyout, a sale or a division before anyone goes to court.
- Coordination with appraisers, the receiver and the bank on any mortgage.
✈️ Co-Owners and Heirs Abroad
- A power of attorney signed where you live, before a local notary and apostilled, or at an Israeli consulate.
- The demand letter, negotiation and claim run in Israel without you having to travel.
- Calls scheduled around your time zone, with drafts sent and explained online.
- Your share of the proceeds paid to your account, with the documents your bank will ask for.
How remote handling works: co-owners and heirs abroad.
Dissolution of Real Estate in Israel: The Three Legal Methods
When co-owners of real estate in Israel do not agree, dissolution of property in Israel is decided by the court in one of three ways: partition in kind, registration of a condominium, or a sale with the proceeds divided by share. The order matters. Where the land can be divided, the law prefers a physical division. Where it cannot, or where a division would cause the co-owners a substantial loss, the court orders a sale. For most apartments, which cannot be divided, the practical result is a sale.
Partition in Kind
Where the land can be divided, each co-owner receives a separate part. If a fair division is possible only with money passing between the co-owners, the court may order balancing payments (Section 39(b)). A division agreed between the co-owners needs the Land Registration Supervisor's confirmation that it complies with planning law (Section 38(a)). Typical for land and larger plots, rarely possible for an apartment.
Condominium Registration
Where the property is mainly a building fit to be registered as a condominium (bayit meshutaf), the court may dissolve the co-ownership by registering the building, after receiving the Supervisor's opinion. The units are allotted to the co-owners according to their shares, with balancing payments where needed. Useful when several families share a building that was never divided into registered units.
Sale and Division of the Proceeds
Where the property cannot be divided, or a division would cause a substantial loss, the court orders a sale and the proceeds are divided by share (Section 40(a)). The sale follows the procedure for land sold in execution unless the court chooses a method it finds more efficient and fair (Section 40(b)). In practice the court usually appoints a receiver, often a lawyer, to run the sale.
Two further rules shape the result. Under Section 41, where the obstacle to a division concerns only some of the co-owners, the others may keep the property, together or divided, and pay those co-owners the value of their shares. Under Section 43, the court takes into account, as far as possible, a request by some co-owners to stay co-owners among themselves. Courts also often use the discretion in Section 40(b) to let the co-owners bid against each other in an internal tender before the property is offered to outsiders.
Comparison: Which Method Fits Your Property?
| Method | Section | When it fits | What you end up with |
|---|---|---|---|
| Agreement between the co-owners | 38(a) | All co-owners are willing to negotiate | A sale, a buyout of one co-owner by another, or a division on agreed terms |
| Partition in kind | 39 | The land can be divided into separate parts | Your own separate part, sometimes with a balancing payment |
| Condominium registration | 42 | A building fit to be registered with separate units | A registered unit in your name, sometimes with a balancing payment |
| Sale and division of proceeds | 40 | An apartment or other property that cannot be divided | Your share of the sale price, after the costs of the sale |
Key Facts on Dissolution of Co-Ownership in Israel
| Item | Rule | Source |
|---|---|---|
| Right to demand dissolution | Any co-owner, at any time, whatever the size of the share | Land Law, Section 37(a) |
| Clause that bars dissolution | If it bars dissolution for more than three years, the court may order dissolution after three years if just | Land Law, Section 37(b) |
| Dissolution by agreement | Allowed; a partition in kind needs the Supervisor's confirmation under planning law | Land Law, Section 38(a) |
| Selling your own share | Allowed without the other co-owners' consent | Land Law, Section 34 |
| Right of first refusal | No general right between co-owners; statutory only between spouses (shared residence, business or farm) and, for a limited period, between heirs of an agricultural farm, or by agreement | Land Law, Sections 99-101 |
| Use by one co-owner | Owes the others a reasonable fee for the use, by their shares | Land Law, Section 33 |
| Spouses' home with minor children | A sale can be ordered, but carrying it out is delayed until the children and the parent they live with have suitable housing | Land Law, Section 40A |
| Court for dissolution claims | Magistrates' Court, whatever the value; Family Court where the co-owners are family members in a family dispute | Courts Law, Section 51(a)(3); Family Court Law, Section 1 |
| Tax on a partition in kind | Exempt when one property is divided among all its co-owners by their shares; a balancing payment is taxed | Land Taxation Law, Section 67 |
| Reporting a sale | Within 30 days, to the Israel Tax Authority | Land Taxation Law, Section 73 |
How to Dissolve Property in Israel, Step by Step
To dissolve real estate in Israel, start with a Land Registry extract and a written demand to the other co-owners under Section 37(a) of the Land Law. If they agree, the co-owners sign a dissolution agreement and sell, buy out or divide the property. If they refuse, a claim is filed and the court orders a division or a sale.
Define Your Goal and Gather the Documents
We go over who the co-owners are, how the property is held, what has been tried and what you want to achieve: your share in money, the property itself, or a quick end to the dispute. We tell you which route is realistic before anything is sent.
Get a Land Registry Extract (Nesach Tabu)
We order a current Land Registry extract (nesach tabu), or, where the property is not registered there, the Israel Land Authority or management company record, and check the exact shares, mortgages, attachments, warning notes and any registered co-ownership agreement. For an inherited property, we check whether the inheritance has been registered on the basis of a succession or probate order.
Send a Written Demand Under Section 37(a)
A formal letter to the other co-owners sets out your right, the options (a sale, a buyout or a division) and a deadline to respond. A clear letter often moves the other side toward an agreement, because it shows what a claim would lead to.
Sign an Agreement or File a Claim
If the co-owners agree, we draft a binding dissolution agreement: who buys out whom, at what price, or how the property is sold and the money divided. If they refuse, we file a claim for dissolution of co-ownership (tvi'a lepiruk shituf) in the competent court, together with any claim for a use fee.
Valuation and Sale by a Court-Appointed Receiver
Where the court orders a sale, it usually appoints a receiver to run it, and an appraiser values the property. Bids are invited, the co-owners may be allowed to compete in an internal tender, and the court approves the sale. Objections to the price or the process are raised at this stage.
Report the Sale, Divide the Proceeds and Register
The sale is reported to the Israel Tax Authority within 30 days, mortgages and attachments are paid off, the costs of the sale are deducted, and the balance is divided by share, adjusted for any use fee the court awarded. The buyer, or the co-owner who received a part, is registered at the Land Registry.
How Long It Takes
An agreed dissolution in Israel moves at the pace of an ordinary property sale; a contested claim often takes more than a year. The timetable depends far more on the co-owners than on the law. A contested claim takes longer when the co-owners dispute the valuation, when some of them live abroad and must be served, or when the sale is challenged. Many contested matters still end in an agreement once the claim is filed and the outcome becomes clear.
Which Court Hears a Dissolution Claim in Israel
A claim to dissolve co-owned property in Israel is heard by the Magistrates' Court whatever the value of the property, unless the co-owners are family members in a dispute within the family, in which case the Family Court hears it. Section 51(a)(3) of the Courts Law [Consolidated Version], 5744-1984 gives the Magistrates' Court (Beit Mishpat HaShalom) jurisdiction over claims about possession, use and partition of land. Under Section 1 of the Family Court Law, 5755-1995 (in Hebrew), family members include spouses (including former spouses), parents and children, and brothers and sisters. A dissolution claim between them that arises from a dispute within the family goes to the Family Court.
That is why most dissolutions between siblings who inherited an apartment are heard in the Family Court, while a claim between unrelated investors goes to the Magistrates' Court. Our page on property disputes in Israeli courts explains the courts that hear other real estate claims.
When a Co-Owner Refuses to Sell: Buyout, Use Fee or Forced Sale
In a shared property dispute in Israel, a co-owner who refuses to sell, to buy you out or even to answer cannot stop a dissolution. The refusal only moves the decision from the co-owners to the court. In practice there are four ways out, and they are often combined: a buyout at a price both sides accept, a joint sale to an outside buyer, the sale of your own share alone, or a claim for dissolution that ends in a court-ordered sale.
Selling Your Own Share
Under Section 34 of the Land Law, each co-owner may sell their own share without the consent of the others. Israeli law gives co-owners no general right of first refusal over that share. The statutory rights of first refusal in Sections 100 and 101 apply only between spouses and, for a limited period, between heirs of an agricultural farm; otherwise, a right of first refusal exists only where the co-owners agreed on one (Section 99). In practice, buyers for part of an apartment are few and pay less than the share's proportion of the full value, which is why a dissolution is usually the better route.
A Reasonable Use Fee (Dmei Shimush) When One Co-Owner Lives There
Under Section 33, a co-owner who used the property owes the other co-owners a reasonable fee for the use, according to their shares. The fee is usually based on the rental value of the property for the other co-owners' shares, and the claim is typically joined to the dissolution claim and set off against the occupier's share of the sale proceeds. Courts look at whether the others were excluded from the property or asked for payment, and the claim is subject to the limitation period, so a written demand should not wait.
When the Other Side Does Not Respond
Silence does not block the process. Once the claim is properly served, including on a co-owner who lives abroad, the court can rule even if that co-owner does not take part. A mortgage or an attachment on the property is paid off from the sale price before the balance is divided, and a property let to a protected tenant is sold subject to the protected tenancy, which usually lowers the price.
We represented a brother who sought to dissolve his co-ownership with his brother in a property they had inherited. The other brother had used the apartment alone for six years without paying rent. The property was sold well above the appraised value, each brother received his share, and our client won a judgment for a use fee for those six years, which was paid to him out of the sale proceeds. Every case depends on its own facts, and past results do not predict the outcome of another matter.
Dissolving an Inherited Estate in Israel
An estate in Israel is not dissolved as such: it passes to the heirs, and an apartment or land that several heirs inherit together becomes co-owned property that any of them may ask to dissolve. When people search for how to dissolve an estate in Israel, they usually mean one of two things. The first is the estate itself: who the heirs are, what each one receives and who manages the assets until they are divided. That is decided by a succession order or a probate order under the Succession Law, 5725-1965 (in Hebrew), and our page on estate administration in Israel explains it. The second is the property the heirs now hold together, and that is what this page is about.
The order of steps is the same in almost every family. First comes the Israeli succession or probate order, which is needed even when the will was made abroad. Then the heirs either agree on a sale or a buyout, or one of them demands dissolution under Section 37(a). Registering the inheritance at the Land Registry is usually part of the process, and in a court-ordered sale it is often handled within it. Where the heirs are siblings or other family members and they disagree, the claim is usually heard by the Family Court. A dispute over the will itself, or over who inherits, is a different proceeding, covered on our page on inheritance disputes in Israel.
Two points often change the result for heirs. An heir who lived in the apartment may owe the others a use fee under Section 33, as in the case above. And when the inherited apartment is sold, the heirs may qualify for an exemption from Capital Gains Tax, explained on our page on selling an inherited apartment in Israel. Israel has no inheritance tax.
A Sibling Lives in the Apartment
A written demand for a use fee, then a dissolution claim with the use fee claim joined to it. The fee is usually set off against that sibling's share of the proceeds.
A Sibling Will Not Sign
An heir's refusal to cooperate does not stop the process: each heir can apply for the order and then demand dissolution on their own. A formal objection to the order moves it to the court and can delay it.
Heirs in Several Countries
Each heir abroad signs a power of attorney where they live. An heir who does not respond is served, and the claim moves forward without them.
A Home Owned by Spouses or Former Spouses
Spouses who own a home together can also dissolve the co-ownership, but when the couple has minor children, Section 40A of the Land Law protects their housing. If the court orders the home sold, the sale is not carried out until the court is satisfied that the minor children and the parent they live with have suitable alternative housing, which may be an interim arrangement. The section protects housing; it does not cancel the right to dissolve.
A dissolution between spouses or former spouses is usually heard by the Family Court, often together with the division of the couple's property. Between Jewish spouses, the home may instead be brought before the rabbinical court as part of a divorce claim. Spouses also have a statutory right of first refusal when the other spouse sells their share of a home that serves as their residence (Section 101), but this right applies to a voluntary sale of a share and does not prevent a court-ordered sale in a dissolution. Court decisions on this subject are summarized, in Hebrew, on our page on dissolving a couple's home.
Taxes When Co-Owned Property Is Divided or Sold
The tax on a dissolution depends on the method: a partition in kind among all the co-owners is generally exempt, while a buyout or a sale is taxed like any other sale of property in Israel. Under Section 67 of the Land Taxation (Capital Gain and Purchase) Law, 5723-1963, dividing a single property, or adjoining plots, among all its co-owners according to their shares is exempt from Capital Gains Tax and Purchase Tax; only a balancing payment is taxed.
- Buyout: the co-owner who sells their share pays Capital Gains Tax on it, unless an exemption applies, and the co-owner who buys pays Purchase Tax on the share bought. A transfer between spouses as part of a property division in a divorce is generally not treated as a sale, subject to conditions.
- Sale to a third party: each co-owner reports the sale of their own share within 30 days (Section 73) and claims their own exemptions. The single-apartment exemption (Section 49B(2)) has a ceiling of ₪5,008,000 in 2026, frozen through 2027; above it, the part of the gain attributable to the excess is taxed. How the ceiling applies to a co-owner's share is checked case by case.
- Co-owners living abroad: a foreign resident can claim the single-apartment exemption only with a certificate from the tax authority of their country of residence confirming that they own no residential apartment there. We arrange this early, because it often takes weeks.
- Betterment Levy: where a plan raised the property's value, a levy may be due on the sale.
Because each co-owner's position differs (for example, one owns another apartment and the other does not), the same sale can be exempt for one co-owner and taxed for another. We check this before the method is chosen. The rates and exemptions on the sale side are set out on our page on Capital Gains Tax when selling property in Israel, and Purchase Tax for a co-owner who buys is explained on our page on buying property in Israel.
What a Dissolution Costs: Court, Appraiser, Receiver and Legal Fees
An agreed dissolution costs much less than a contested one, because it needs no claim, no receiver and usually a single valuation. In a contested case, plan for a court fee set by the Courts Regulations (Fees), an appraiser's fee, and, where a sale is ordered, the receiver's fee. The court sets the receiver's fee at its discretion, usually as a percentage of the sale price plus VAT, and it is generally paid out of the proceeds. Where the Family Court appoints the receiver, its regulations cap the fee at 4% of the sale proceeds. Many of these costs end up borne by the co-owners in proportion to their shares.
Our legal fees
Legal fees are set by the nature of the work and agreed in writing in advance, stage by stage, so you decide on each step knowing its cost. You receive a written quote after we review the matter and before you commit.
A review of the register and the documents, a written assessment of the options and a demand letter under Section 37(a).
Negotiation and a binding dissolution agreement for a sale, a buyout or a division, through to the transfer.
A dissolution claim, with any use fee claim, quoted by stage from filing to the court-ordered sale and the division of the proceeds.
Adds the power of attorney, signing instructions for your country and the transfer of your share of the proceeds.
Why Co-Owners Choose Eliyahu & Co.
A dissolution sits between litigation and a property sale. The office handles both, so the same lawyer who files the claim also knows how the property will be valued, sold, taxed and registered at the end.
Co-Ownership Lawyer in Israel: Adv. Reut Eliyahu
Founder & Managing Attorney | Eliyahu & Co. Law Office
LL.B. · MBA · Notary · Registered Arbitrator
Adv. Reut Eliyahu founded Eliyahu & Co. in 2011 as a civil, commercial and real estate law office. She has 19+ years of legal experience, is a member of the Israel Bar Association, holds an LL.B. and an MBA, and is a notary and a registered arbitrator.
In dissolution matters she represents co-owners, heirs, former spouses and business partners, from a single inherited apartment shared by two siblings to land held by many heirs. The outcome of a dissolution rarely depends on the claim alone: it depends on reading the register correctly, on a realistic valuation, and on knowing when an offer is worth taking. As a notary, she can also certify the documents co-owners abroad need.
Typical Situations Co-Owners Bring to Us
These are general scenarios, not specific cases. Each one is resolved differently depending on the facts, the shares and the people involved.
Client Reviews on Google
Reviews from our clients, published on Google
Clients review the office on its Google Business Profile. You can read their reviews there, and after we work together, add your own.
"I hired Adv. Reut Eliyahu for a claim to dissolve the co-ownership of real estate, on the recommendation of a close friend. She handled my case personally throughout and ran the claim professionally and superbly. For the sale of the apartments my brothers and I had inherited, I received more than I expected, in minimum time. After the proceedings ended, she represented me in buying a house in Herzliya, to my full satisfaction."
Reviews describe individual clients' experiences. Every matter depends on its own facts.
The stars here are the office's Google Business Profile rating. The rating at the top of the page is how visitors rated this page. These are two different measures.
Questions Co-Owners Ask Us
Answers to the questions we hear most often from co-owners and heirs in Israel and abroad.
This page is general information about Israeli law as of October 2026, not legal advice for your specific matter. Tax ceilings change, and we confirm the current figures for each case.
Legislation cited on this page:
Land Law, 5729-1969 (Sections 33, 34, 37(a), 37(b), 38(a), 39, 40, 40A, 41, 42, 43 and 99-101) ·
Courts Law [Consolidated Version], 5744-1984 (Section 51(a)(3)) · Family Court Law, 5755-1995 (Section 1) · Land Taxation (Capital Gain and Purchase) Law, 5723-1963 (Sections 49B(2), 67 and 73) · Family Court Regulations (Rules of Procedure), 5781-2020 (receiver's fee) · Succession Law, 5725-1965. Links to the Land Law, the Family Court Law and the Succession Law lead to Hebrew pages on our site.
Co-Owners and Heirs Abroad: How We Handle a Dissolution While You Live Overseas
You can dissolve co-owned property in Israel without traveling to Israel: you sign one power of attorney before a local notary with an apostille, or at an Israeli consulate, and we act for you here. Many of the co-owners we represent share an Israeli apartment with relatives who live in it or near it. The Israeli process is the same wherever you live. What changes is how the power of attorney is signed and certified, how you follow a case in Hebrew from far away, and how your share of the money reaches you. Clients in North America can also call our US line, +1 (310) 735-4210.
North America
The power of attorney is signed before a local notary and apostilled by the competent authority of your state. In Canada, which has issued apostilles since January 2024, the apostille comes from your province where it issues them, or otherwise from Global Affairs Canada. Calls are set early in the North American morning, when the Israeli working day is still open.
UK and Europe
In the UK the apostille is issued by the FCDO, and elsewhere in Europe by the competent national authority. Where the Israeli apartment is part of an estate also handled in Europe, the local succession rules are checked with a foreign law opinion before any step is taken in Israel.
Latin America and Australia
Service is available in Spanish. Brazil, Argentina and Australia are parties to the Apostille Convention, so a power of attorney signed before a local notary and apostilled is accepted through the standard procedure. For Australia, the time difference is planned into every deadline.
One Power of Attorney, the Whole Process
You sign once, and we can send the demand, negotiate, file the claim and deal with the receiver, the Land Registry and the Tax Authority on your behalf.
Every Hebrew Document Explained
Pleadings, decisions, appraisals and offers reach you with a short explanation in English or Spanish of what they mean for you and what, if anything, you need to decide.
Your Interests on Site
When relatives in Israel control the property, we check the register, the valuation and the sale process for you, so decisions are not made without you.
Your Share Paid Abroad
We prepare the documents your bank will ask for and coordinate the transfer of your share, after the tax reports for the sale are filed.
We represented sellers living in the United States in the sale of an entire building in Tel Aviv, with several potential buyers involved. All documents and declarations were signed abroad, with the verification that Israeli law and the Land Registry require, and every signing was scheduled around the time difference. The deal closed without problems and the funds reached the sellers.
Get in Touch: Free First Consultation
Want to end a co-ownership in Israel? Tell us where the property is, who the co-owners are, how it came to be shared and where you live today, and we will get back to you within one business day. We meet by phone, by video call or at our office.
4 HaOgen Street, Herzliya Pituach 4655102, Israel
Sun-Thu: 08:00-19:00
Fri: 08:00-13:00
Meetings at the office, by Zoom or by phone.
How to Dissolve Co-Owned Property in Israel?
Free first consultation — no obligation, no fee.
We'll review the property, identify the risks, and map out the steps together — sale, partition or buyout.