Exemption from Transfer Tax for Estates Relating to Deaths Occurring Before 1 January 2007

Introduction

The Lebanese Ministry of Finance issued a statement concerning the exemption of events occurring before 1 January 2007 from inheritance and transfer taxes, pursuant to Paragraph One of Article 45 of Law No. 40 dated 10 February 2026 (the 2026 General Budget Law), which amended Article 1 of the Transfer Tax Law.

As this measure affects thousands of Lebanese families whose inheritance files have remained pending for many years, this article aims to simplify the content of the statement, explain its practical impact on citizens, and outline the legal and administrative steps that remain necessary.

First: What Is the Transfer Tax?

The transfer tax is a tax imposed under Lebanese law on all movable and immovable rights and assets transferred from one person to another by way of inheritance, will, gift, endowment (waqf), or any other gratuitous transfer.

The tax is governed by Legislative Decree No. 146 dated 12 June 1959, as amended (the Transfer Tax Law). It becomes due upon death, upon a judicial declaration of death of an absentee, or upon the taking effect of a gift or endowment.

Among the key provisions of Article 50 of the aforementioned Legislative Decree is the prohibition against the competent judicial authorities issuing inheritance determinations before the interested parties obtain a special authorization from the competent financial departments. In practice, this requirement had created an obstacle to the completion of many inheritance procedures, particularly in very old cases.

Second: Content of the New Amendment

Paragraph One of Article 45 of the 2026 General Budget Law (Law No. 40 dated 10 February 2026) amended Article 1 of the Transfer Tax Law so as to provide that:

1. Events occurring before 1 January 2007 are exempt from transfer taxes.

2. The competent judicial authorities may issue inheritance determinations and enforce wills for interested parties in cases involving deaths occurring before 1 January 2007, without requiring the authorization previously required from the competent departments of the Ministry of Finance, notwithstanding the provisions of Article 50 of Legislative Decree No. 146 dated 12 June 1959, as amended.

Accordingly, the Ministry of Finance has informed interested parties that events occurring before 1 January 2007 are now exempt from transfer taxes and that, in cases involving deaths occurring before that date, they may obtain inheritance determinations directly from the competent judicial authorities without first obtaining authorization from the financial authorities.

Third: Historical Context of the Measure

This is not the first time that old inheritance cases have been exempted from transfer taxes:

• Under Law No. 66 dated 3 November 2017 (the 2017 General Budget Law), Article 53 exempted estates relating to events that occurred before 13 October 1994 from transfer taxes and allowed heirs to obtain inheritance determinations without prior financial authorization.

• Under the 2026 Budget Law, the scope of this exemption has been expanded to cover all events occurring before 1 January 2007, thereby adding approximately twelve years to the period covered by the previous exemption.

This approach reflects a gradual policy aimed at addressing the accumulation of old and unresolved inheritance files, which have been delayed for various reasons, including the passage of many years since the death, the number of heirs involved, the relocation of some heirs abroad, and the difficulty of completing the required documentation.

Fourth: Practical Impact on Citizens

1. Direct Financial Exemption

Heirs concerned with a death that occurred before 1 January 2007 are no longer required to pay transfer tax on the relevant estates. This removes a financial burden that was often a major reason for inheritance procedures remaining unresolved for many years.

2. Simplification of Inheritance Determination Procedures

Before the amendment, the applicable system generally required:

• Filing a declaration with the competent financial department concerning the assets of the estate;

• Completing the required documents and supporting evidence;

• Obtaining authorization from the Ministry of Finance; and

• Only then obtaining an inheritance determination from the competent judicial authority.

Following the amendment, in cases involving deaths occurring before 1 January 2007, heirs may proceed directly before the competent judicial authority — whether the civil court, the Single Civil Judge, or the relevant religious or Sharia court, depending on the deceased's religious affiliation — to obtain an inheritance determination, without first going through the financial authorization process.

3. Reactivating Files That Have Been Pending for Years

Many Lebanese families have faced a legal and administrative obstacle whereby properties remained registered in the name of a grandfather, father, or mother who had died decades earlier, without being transferred to the heirs due to the complexity and cost of completing the relevant procedures.

The new amendment makes it possible to:

• Reopen these files;

• Complete the transfer of movable and immovable assets — including real estate, bank accounts, and financial rights — to the actual heirs; and

• Regularize estates involving, in some cases, several successive generations of heirs.

4. Positive Impact on the Real Estate Market

From an economic perspective, reactivating old inheritance files may contribute to:

• Regularizing land registry records and bringing them up to date;

• Releasing properties that have effectively remained frozen due to the failure to complete the inheritance transfer process; and

• Potentially facilitating the subsequent sale, mortgaging, or investment of such properties in accordance with the applicable legal procedures.

Fifth: What Is Still Required from the Heirs?

It is important to note that the exemption does not eliminate the entire inheritance procedure. Rather, it specifically eliminates the taxes applicable to events occurring before 1 January 2007 and removes the requirement for prior financial authorization for the issuance of an inheritance determination in such cases.

In general, heirs must:

1. Apply to the competent judicial authority to obtain an inheritance determination in accordance with the religious affiliation of the deceased.

2. Complete the subsequent procedures for transferring ownership that start before the notary public and the land registry authorities. The transfer record is prepared before the notary public, and the relevant shares are registered in the names of the heirs in the land registry according to the proportions established in the inheritance determination.

3. Verify the date of death accurately. The exemption applies only to events occurring before 1 January 2007. Deaths occurring on or after 1 January 2007 remain subject to the Transfer Tax Law and its ordinary requirements, including the obligation to file the relevant declaration and obtain financial authorization.

4. Consult qualified legal professionals where necessary, particularly in complex cases involving heirs residing abroad, multiple movable and immovable assets, or disputes among heirs.

   Legal reference: Paragraph One of Article 45 of Law No. 40 dated 10 February 2026 (the 2026 General Budget Law), which amended Article 1 of the Transfer Tax Law.

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