Israeli property taxes 2026 cover two main taxes that apply to most Israeli real estate transactions. Israeli Property Purchase tax – Mas Rechisha (מס רכישה), paid by the buyer when purchasing property and Israeli Property Capital gains tax – Mas Shevach (מס שבח) is paid by the seller when selling at a profit. Understanding which tax applies, at what rate, and under what conditions is essential before entering any Israeli property transaction.
This article sets out the current rates for both Israeli property taxes 2026 as they apply, across all buyer and seller categories. Link to the Israeli Tax Authority
ISRAELI PROPERTY TAXES 2026 – PURCHASE TAX – MAS RECHISHA
Paid by: the buyer
When: within 60 days of signing the purchase agreement
Calculated on: the full purchase price
Purchase Tax / Mas Rechisha is a progressive tax, each rate applies only to the portion of the purchase price that falls within that bracket, not to the total amount. The applicable rate depends on the buyer’s residency status and whether the property is their sole residential property in Israel.
Note: The Mas Rechisha brackets below are frozen through 2027.
Israeli Residents — Sole Residential Property
For an Israeli resident purchasing their first or only home in Israel:
0 – 1,978,745 NIS: 0%
1,978,745 – 2,347,040 NIS: 3.5%
2,347,040 – 6,055,070 NIS: 5%
6,055,070 – 20,183,565 NIS: 8%
Above 20,183,565 NIS: 10%
Israeli Residents (Additional Properties), Non-residents and Investors
For an Israeli resident purchasing a second or subsequent property or non-residents, whether foreign nationals or Israeli citizens living abroad. The following rates apply from the first shekel:
0 – 6,055,070 NIS: 8%
Above 6,055,070 NIS: 10%
For purchases made between February 28, 2024 and May 30, 2026, due to the ongoing security situation an extended window has been given to a non-resident who purchases property and subsequently becomes an Israeli tax resident within 27 months of the purchase date and may apply for a refund of the difference between the non-resident rate paid and the single-residence rate.
Olim Chadashim — Purchase Tax Benefits for New Immigrants
Olim, new immigrants purchasing their sole residential property in Israel benefit from a significantly reduced purchase tax rate under Regulation 12 of the Purchase Tax Regulations (תקנה 12 לתקנות מס רכישה).
The August 2024 amendment to the Israeli Purchase Tax Regulations introduced Regulation 12a (תקנה 12א) for residential property purchases by Olim, while Regulation 12 (תקנה 12) was narrowed to apply to commercial property and agricultural land. An Oleh may benefit from both independently.
Regulation 12a — Residential Property (purchase from August 15, 2024)
Applies to the Oleh’s sole residential property:
0 – 1,978,745 NIS: 0%
1,978,745 – 6,055,070 NIS: 0.5%
6,055,070 – 20,183,565 NIS: 8%
Above 20,183,565 NIS: standard rates apply
Regulation 12 – for all Olim
0 – 1,988,090 NIS: 0.5%
Above 1,988,090 NIS: 5%
Olim who made aliyah before August 15, 2024 and have not yet used their benefit may elect between Regulation 12 and Regulation 12a for a residential property purchase.
For a full article on Olim purchase tax benefits, eligibility and conditions, see our dedicated article: Israeli Property Tax for Olim.
Inheritance — No Purchase Tax
No Purchase tax Mas Rechisha is payable by an heir/beneficiary receiving property through inheritance. The transfer of property from a deceased estate to beneficiaries is exempt.
ISRAELI PROPERTY TAXES 2026 – CAPITAL GAINS TAX – MAS SHEVACH
Paid by: the seller
When: reported within 40 days of signing the sale agreement
Calculated on: the real, inflation-adjusted net gain
Capital Gains Tax / Mas Shevach applies when a property is sold for more than it was purchased. The taxable gain is not the gross profit it is calculated after adjusting the original purchase price for inflation and deducting allowable expenses.
Standard Rate
25% of the real (inflation-adjusted) net gain.
Exemption — Israeli Residents Selling Their Sole Property
An Israeli resident may be fully exempt from Mas Shevach on the sale of their sole residential property if all conditions set in the law are met
Non-Residents — Capital Gains Tax on Property Sales
A foreign resident may qualify for an exemption if they can prove they do not own a residential property abroad.
Linear Rate Calculation — Properties Purchased Before January 1, 2014
For properties purchased before January 1, 2014, the gain is apportioned between the pre-2014 and post-2014 periods. Only the post-2014 portion is taxed at the current 25% rate. The pre-2014 portion is taxed at the historical rate applicable at the time of purchase, which is typically lower.
Inheritance — Capital Gains Tax
A heir/beneficiary receiving property through inheritance takes on the acquisition date and original cost basis of the deceased for Mas Shevach purposes. Capital gains are calculated from the original purchase, not from the date of inheritance.
VAT on New Construction – On plan projects purchase
Purchases of new residential property directly from a developer are subject to VAT at 18%.
Before you proceed
The Israeli Property taxes 2026 rates and conditions in this article reflect the rules applicable in 2026. Real estate taxation in Israel involves multiple overlapping variables such as, buyer and seller status, property value, residency timeline, prior transaction history, and applicable exemptions.
Please contact an Israeli Real Estate lawyer for further advice and legal counsel.
For Israeli real estate property transactions and taxes, estate planning, and succession matters involving Israeli assets, I am always available for a consultation.