Israel Property Purchase Tax Updated
The Tax Authority has adjusted the purchase tax rates today, as it does so annually, effective from the 6th of Shevat, 5784 (January 16, 2024) through the 15th of Tevet, 5785 (January 15, 2025), aimed at reducing buyer’s tax burden upon purchase.
According to the current tax rates, the buyer of a single residence will be completely exempt from paying purchase tax , on the portion of the value up to NIS 1,978,745. On the part of the value that exceeds NIS 1,978,745 and up to NIS 2,347,040, a 3.5% tax will apply, above that and up to NIS 6,055,070 purchase tax at a rate of 5% will be apply. A tax of 8% will be paid on the portion of the value exceeding NIS 6,055,070 and up to NIS 20,183,565, and a tax of 10% will be paid on the portion of the value exceeding NIS 20,183,565. According to the Israeli Tax Authority “a single apartment” is defined as:
1. residential home that is the only home of a resident of Israel
2. someone who has become a resident of Israel (Oleh Hadash) or a returning resident (Toshav Hozer) within two years of purchasing the apartment.
3. One owns a residential apartment in which the buyer’s share does not exceed one-third (1/3).
4. inheritance owns a property and ones share does not exceed 50%.
5. Also one who purchases a second home and sells the first one within 18 months.
Oleh Benefits
As per Regulation 12 of the Purchase Tax act, a buyer defined as a “new immigrant” (Oleh Hadash) is eligible for a reduction in purchase tax when acquiring a residential or commercial property . This benefit applies during the period starting one year before immigration to Israel and concluding seven years after. For purchases made between the 6th of Shevat, 5784 (January 16, 2024), and the 15th of Tevet, 5785 (January 15, 2025), the tax reduction rates applies as follows:
1. 0.5% on the value up to 1,988,090 ILS
2. 5% on the value exceeding 1,988,090 ILS
For more information regarding property law, tax, foreign buyers and investors interested in Israeli Real Estate contact:
Sandrine Moyal, Adv
972.54.613.9733