Israel – Property Taxes

What taxes and fees apply when buying a property in Israel?

Anyone acquiring real estate in Israel is required to pay a property purchase levy known in Hebrew as Mas Rechisha. This progressive tax is charged to the buyer at the point of acquisition and varies according to the property’s value, whether it represents a first or additional holding, and the buyer’s Israeli residency status. Always confirm current brackets with the Israel Tax Authority prior to finalising any transaction.

Israel does not operate a conventional stamp duty framework of the kind common in Commonwealth countries, so the central transactional cost you must plan for as a buyer is the purchase tax (Mas Rechisha), which your legal representative handles in accordance with the signed contract timeline. Unlike UK stamp duty, which is assessed at a single point using tiered bands, Mas Rechisha is computed progressively so that each portion of the purchase price is assigned to its own bracket.

The purchase tax system falls under the authority of the Israel Tax Authority. In contrast to many other jurisdictions where transfer taxes are shared between buyer and seller, in Israel the purchase tax is borne entirely by the buyer. It is assessed against whichever is greater: the agreed purchase price or the property’s market value.

The key relief concept in Israel is not a “first-time buyer” designation in the conventional sense, but rather whether the purchaser qualifies as acquiring a “single residential apartment” under the relevant legislation. This status entitles Israeli residents to a 0% rate on the opening slice of value up to approximately NIS 1,978,745 (as of 2024). Above that figure, rates climb progressively through intermediate bands before reaching higher levels on the upper portions of the price. Always consult the Israel Tax Authority for current thresholds, as these are ordinarily revised each mid-January.

For buyers purchasing beyond their first home — and for most foreign residents — the Mas Rechisha structure essentially operates as a two-tier cliff: approximately 8% applies to the bulk of the price and 10% kicks in above a defined upper threshold. In practice, the thresholds updated in January 2024 remain fixed in nominal shekel terms through at least 2027, even as property prices continue to move.

From 1 January 2025, VAT in Israel rose from 17% to 18%. When buying a newly built home, prices are usually quoted exclusive of VAT, which inflates the purchase price and similarly raises ancillary costs such as legal and agency fees. This increase does not affect second-hand transactions conducted between private individuals, as no VAT is applied to those sales.

Commercial properties and land are subject to a flat rate, generally 6% of the total value.

Mandatory costs when acquiring property in Israel encompass purchase tax (Mas Rechisha) payable to the Israel Tax Authority, a property lawyer to manage the contract and registration process, and land registry due-diligence charges such as a Tabu extract. Costs that are optional but strongly advisable include a buyer-side estate agent, translation or notarisation of Hebrew-language documents, a licensed property valuer, and a tax adviser where residency or ownership arrangements are complex.

By way of illustration, consider an Israeli resident buying their sole home for NIS 3,000,000 in 2025: the first NIS 1,978,745 is taxed at 0%, and the remainder falls into progressively higher intermediate bands. For a first-time buyer, the total purchase tax on a 3,000,000-shekel apartment amounts to approximately NIS 45,538 under the 2024 thresholds. An investor or foreign resident buying the identical property would pay roughly 8% across most of the price — more than four times the amount. Always verify precise figures using the Israel Tax Authority’s online purchase-tax calculator before signing any agreement.

The buyer must notify the Israel Tax Authority of the property acquisition within 30 days of the purchase date by submitting Form 7000. The purchase tax itself must be paid within 60 days of the purchase date. Registration of the property cannot proceed until the tax liability has been discharged.

What taxes and fees apply when selling a property in Israel?

Mas Shevach — also referred to as Capital Gains Tax or Appreciation Tax — is a real estate levy that arises when you sell Israeli property at a profit. Where a property is disposed of for more than its original acquisition cost, the resulting “gain” constitutes taxable income. This is the principal tax exposure facing sellers, and it is examined in depth in the following section.

Beyond capital gains tax, sellers typically incur a range of professional costs. Estate agent commissions in Israel conventionally run at around 2% of the sale price plus 18% VAT (as of 2025), though this is negotiable on higher-value transactions. Legal fees for the seller’s solicitor generally fall between 0.5% and 1% plus VAT. Neither figure is set by law and both can vary considerably; always obtain written fee schedules before proceeding.

Sellers are required to report a disposal to the Israel Tax Authority within 30 days to avoid potential charges on any profit. Late filing can attract interest and penalties, making it strongly advisable to engage a qualified Israeli property lawyer well in advance of completion.

The taxable gain is established by deducting the original acquisition cost from the sale proceeds, with adjustments for inflation and permissible deductions including legal fees, estate agent commissions, purchase tax paid on the original acquisition, and capital improvement costs incurred during the period of ownership. Maintaining thorough records of all such expenditure throughout ownership can substantially reduce the eventual tax liability.

There is no separate sales tax or conveyancing levy charged to the seller on top of Mas Shevach. The betterment levy (Hetel Hashbacha) — a distinct municipal charge triggered when a planning decision increases a property’s value — may also come into play if the property has benefited from a zoning change or approved extension during your ownership. This levy is assessed by the local planning authority rather than the national tax administration.

How does capital gains tax work on property in Israel?

When disposing of a property in Israel, a clear understanding of Mas Shevach — capital gains tax — is indispensable. This tax is levied on the net profit derived from the sale. Although the rules can be intricate, available deductions and exemptions can meaningfully reduce or even eliminate the liability in certain circumstances.

As a general rule, capital gains tax is charged at 25% of the net gain. Unlike the United States, where tax is also levied on the inflationary component of any gain, Israel strips out inflation before arriving at the taxable figure. Only the “real” appreciation above inflation is taxed at the full rate, making the Israeli system more advantageous for long-term property holders than those in many comparable jurisdictions.

The calculation proceeds as follows: the taxable gain is determined by subtracting the original acquisition cost from the sale proceeds, adjusting for inflation, and then deducting permissible costs such as legal fees, agent commissions, purchase tax paid at acquisition, and documented capital improvements carried out during ownership.

As a worked example (as of 2025): suppose you acquired an apartment for NIS 2,000,000 in 2010 and sell it in 2025 for NIS 4,000,000. After an inflation adjustment that lifts the cost base to, say, NIS 2,500,000 in current terms, and after deducting NIS 200,000 in allowable costs (legal fees, original purchase tax, and documented refurbishment work), the taxable gain stands at NIS 1,300,000. At 25%, the Mas Shevach due would be approximately NIS 325,000. Verify the precise consumer price index adjustment factors and eligible deductions with the Israel Tax Authority or a qualified Israeli tax adviser.

If you acquired your property before 1 January 2014, you may be entitled to a reduced “Linear Rate,” under which tax applies only to appreciation accruing after that date. For instance, if you bought a property in 2000 and sell it in 2025, you would be taxed only on the gain attributable to the period from 2014 onward — 11 of the total 25 years of ownership.

In January 2024, the Israeli Ministry of Finance put forward a proposal for the phased elimination of the Linear Tax Rate benefit beginning in 2026, with full abolition anticipated by January 2030. This reform is intended to equalise the tax burden on property sellers irrespective of when their properties were first purchased. Sellers who acquired property before 2014 should seek timely professional advice to assess how this proposal may affect their position.

The “single residence exemption” is widely discussed among Israeli property owners. It provides a full exemption from Mas Shevach on the sale of a qualifying home, but the eligibility conditions are narrow enough that many sellers fall short. To qualify: the property being sold must be the seller’s only residential holding in Israel; the seller must have owned it for at least 18 months before the sale; the exemption must not have been claimed on any other property within the preceding 18 months; and the sale price must not exceed approximately NIS 5,000,000, with partial relief available above that figure.

Mas Shevach applies to both Israeli and foreign residents, though the applicable rules diverge. As a non-resident, you cannot access the key exemptions available to Israeli tax residents — most notably the full exemption on the sale of a sole residential home. You may, however, still benefit from the reduced Linear Rate covering only gains accrued from 1 January 2014.

As of 2025, the portion of an individual’s annual taxable income from capital sources — including real estate appreciation — exceeding NIS 721,560 attracts an additional 2% surtax. This applies on top of a 3% surtax on total annual taxable income from all sources above the same threshold. Always consult the Israel Tax Authority for current rates and thresholds.

Are there any ongoing annual property taxes in Israel?

Israel’s municipal property tax, known as Arnona, is levied by local authorities to fund their operations and public services. It is computed according to several parameters, including the building’s designated purpose, its floor area, the socio-economic character of the neighbourhood, and other local factors.

In contrast to property taxes in many countries, Arnona is charged to occupants rather than owners, meaning both purchasers and tenants must factor this recurring expense into their budgets. This is a notable distinction: much like the way council tax in the United Kingdom falls on the resident rather than the legal titleholder, Arnona follows the occupier. In a tenancy arrangement, the renter ordinarily pays Arnona directly to the municipality unless the lease agreement provides otherwise.

Every residential and commercial property in Israel is subject to Arnona, assessed on the basis of the property’s floor area in square metres, its geographic location, and its classification by use. In Tel Aviv, the municipality sets Arnona rates annually, and they rank among the highest in the country, reflecting the city’s premium level of services and infrastructure.

The applicable rate is determined by the city council at the start of each year, typically as part of the municipal budget process. Rates can differ markedly between neighbourhoods within the same local authority; in upmarket villa districts, municipalities commonly levy higher charges than in lower-income areas, even when the standard of services provided is broadly similar.

To illustrate the range, Arnona rates in Tel Aviv generally fall between NIS 70 and NIS 120 per square metre annually, depending on the area and property type. Premium seafront and city-centre locations tend to attract rates at the upper end of that band. In Jerusalem, by contrast, the lowest rate stands at NIS 40.40 per square metre per year, while the highest is approximately 180% more, reaching NIS 113.22 per square metre.

Arnona is typically collected on a bi-monthly basis. Every few years, the local authority is entitled to measure the property afresh to ensure that the levy reflects any change in floor area resulting from renovation or extension work. The age of the building also influences the rate — newer constructions attract higher Arnona charges than older properties.

Certain categories of occupant, including senior citizens, people with recognised disabilities, and recipients of government welfare support, may qualify for Arnona reductions or exemptions, though entitlement varies by municipality and requires a formal application. Supplementary discounts are available on social grounds — for example, for retirees, single parents, or households experiencing financial hardship. Contact your local municipality directly to enquire about eligibility criteria.

How does inheritance tax apply to property in Israel?

Israel imposes no estate or inheritance tax whatsoever. Property transferred to heirs upon an owner’s death does not attract any separate inheritance, estate, or succession duty at the national level — a material distinction from countries such as France, the United Kingdom, or the United States, where inherited real estate can generate substantial tax liabilities.

No purchase tax arises on property received by way of inheritance. For capital gains purposes, the heir steps into the shoes of the deceased — meaning that when the heir eventually sells the property, the gain is measured from the original owner’s acquisition date and cost base, not from the date on which the inheritance was received. This treatment can carry significant implications for future capital gains tax planning, particularly where the property has been held for a lengthy period.

Transfers of property between family members — whether by way of gift or inheritance — may qualify for reduced purchase tax rates or complete exemptions in certain circumstances. The applicable conditions depend on the relationship between the parties and the nature of the transfer. A qualified Israeli lawyer should be engaged to confirm eligibility before any such transaction is concluded.

Non-resident heirs inheriting Israeli property are subject to the same absence of inheritance tax as Israeli residents. That said, the eventual sale of inherited property will trigger Mas Shevach (capital gains tax) on any gain accrued since the original purchase, and non-residents are generally ineligible for the primary-residence exemption. Tax treaties between Israel and the heir’s country of residence may also be relevant — professional advice from someone experienced in cross-border Israeli real estate matters is strongly recommended.

Always verify the current position with the Israel Tax Authority or the Israeli Ministry of Justice, since the treatment of inherited partial interests in property — for example, a share passed down from a parent — can affect whether a buyer qualifies for purchase tax relief on a future acquisition.

How does gift tax apply to property transfers in Israel?

Israel does not impose a dedicated gift tax on the transfer of assets. This holds true for real estate as well as other classes of property, making Israel comparatively straightforward from a gift-tax perspective relative to countries such as the United States — which operates a federal gift tax system with lifetime allowances — or France, which applies progressive inheritance and gift taxes based on the family relationship between the parties.

The absence of a gift tax does not, however, render inter vivos property transfers between living parties entirely free of tax consequences. Transfers of real estate between family members by way of gift may qualify for reduced Mas Rechisha rates or exemptions under specific conditions. The standard purchase tax brackets can apply to gifted properties depending on the circumstances, though preferential rates are available for close-family transfers that satisfy the relevant legal criteria. Consult the Israel Tax Authority or a qualified Israeli property lawyer for the conditions applicable to your particular relationship and situation.

When a property is gifted, the recipient also inherits the capital gains exposure of the original owner. Should the recipient later dispose of the property, Mas Shevach will be computed from the original acquisition price and date — not from the date of the gift. This makes careful planning essential before gifting property that has appreciated significantly in value.

Where a non-resident is involved in a gift transaction — either as donor or donee — the same principles apply, but the interaction with tax obligations in the non-resident’s country of domicile must also be taken into account. Some jurisdictions tax their residents on gifts received from abroad, and the value of Israeli real estate gifted internationally may need to be reported. Always obtain advice from a tax professional conversant with both Israeli law and the domestic law of your country of residence.

How is rental income from property taxed in Israel?

Rental income derived from residential property in Israel is subject to income tax, and both residents and non-residents who own Israeli real estate are liable. The Israel Tax Authority makes three main taxation routes available to individual residential landlords, and the optimal choice hinges on total income level, the scale of deductible expenses, and residency status.

Individual landlords — including spouses together with their minor children — are entitled under certain conditions to select from the following alternatives. Where monthly rental income falls below a defined threshold, a complete income tax exemption is available without requiring any special approval. As of 2025, this threshold stands at NIS 5,654 per month.

The three options available to residential landlords are:

• Full exemption: Where monthly rent from all Israeli residential properties combined does not exceed approximately NIS 5,700 (as of 2026), no income tax is payable. This ceiling applies to aggregate rental receipts, not on a per-property basis. Confirm the current figure with the Israel Tax Authority.
• 10% flat tax: As of early 2026, the most widely used option among Israeli residential landlords is a simplified 10% flat tax on gross rental receipts, under which no expense deductions are permitted. This approach is straightforward to administer and suits landlords whose deductible costs are relatively modest.
• Marginal income tax rate: Rental income can be folded into total taxable income, with allowable expenses deducted before arriving at the taxable figure. Under this progressive route, eligible deductions encompass depreciation (at 2% per annum), building insurance, municipal charges, management fees, maintenance, and repairs. This option suits landlords with significant deductible costs or a lower overall income level.

As a worked example for the flat-rate option (as of 2025): a landlord receiving NIS 8,000 per month in rent (NIS 96,000 per year) would owe a flat 10% tax of NIS 9,600 for the year, with no deductions available. Under the marginal rate route, if allowable expenses — depreciation, insurance, and maintenance — totalled NIS 20,000, the taxable income would be NIS 76,000, taxed at the landlord’s applicable marginal rate. The best choice depends on individual circumstances.

Residential lettings are generally exempt from VAT provided the tenancy is for fewer than 25 years. Short-term holiday rentals — for example, those offered through online letting platforms — may be treated differently and can give rise to VAT obligations if the landlord is deemed to be conducting a business activity. Landlords operating in the short-term rental market should seek tailored advice from a tax adviser, as the regulatory framework for this sector remains less clearly defined.

Non-resident landlords are generally taxed on Israeli rental income at source and must comply with Israeli reporting requirements. The interplay with tax obligations in the landlord’s country of residence — and any double taxation treaty between Israel and that country — is an important additional consideration. The Israel Tax Authority publishes current rates and the list of applicable tax treaties.

Are there any tax advantages or incentives for buying property in Israel?

Israel provides meaningful tax benefits tied to immigration status, family circumstances, and disability, though broad universal incentives for property purchasers are more limited than in certain other countries.

New immigrants (Olim Hadashim): In a significant policy development, the Israeli government announced substantial changes to the purchase tax (Mas Rechisha) for new immigrants (Olim), including a material reduction in the applicable rate, effective from 15 August 2024. These revisions are designed to make the benefit more accessible and to provide better support to new Olim undertaking their first home purchase. Eligibility extends for seven years from the date of Aliyah, and the relief applies to a property that the Oleh uses as their primary residence. The benefit is subject to a cap: where the total property value exceeds approximately NIS 20.18 million, the Oleh benefit is unavailable and standard rates apply in full.

Single-residence relief for Israeli residents: First-time homebuyers who are Israeli residents benefit from favourable tax rates, with a zero-rate band applied to the initial tranche of property value. The 0% bracket on the first portion — up to approximately NIS 1,978,745 (as of 2024) — represents a significant saving when compared with the rates borne by investors or overseas buyers.

Disability exemptions: Individuals with recognised disabilities may qualify for reduced purchase tax rates or exemptions subject to specific criteria. The precise conditions must be confirmed with the Israel Tax Authority.

Capital gains exemption on a primary residence: As described above, Israeli residents who sell their sole home after holding it for at least 18 months may qualify for a complete exemption from Mas Shevach — effectively paying zero capital gains tax — provided the sale price does not exceed approximately NIS 5,000,000 (as of 2025). This is a substantial benefit that non-residents are unable to access.

Rental income exemption: Individual residential landlords are entitled to a full income tax exemption on rental receipts not exceeding NIS 5,654 per month (as of 2025), with no special approval required.

Israel does not provide mortgage interest deductibility for owner-occupiers in the manner found in some other countries — such as the Netherlands or, historically, the United States. The marginal income tax route for rental income does permit the deduction of certain mortgage-related costs, but the rules governing precisely what qualifies are specific. Always seek professional advice before making financial plans based on assumed deductions. Consult the Israel Tax Authority for the latest eligibility criteria and threshold figures.

What are the tax implications for foreign nationals buying property in Israel?

Foreign nationals can generally acquire property in Israel without facing specific ownership restrictions, but the tax framework that governs such purchases is materially different from — and in most respects more costly than — the one applying to Israeli residents. A thorough understanding of these differences before entering into any commitment is essential.

Higher purchase tax: Foreign residents pay Mas Rechisha at the same rate as Israeli residents who hold more than one property in Israel. Foreign investors face an elevated rate on all properties, with the levy ranging from 8% to 10% on values above NIS 6,055,070 (per the 2024 purchase tax update). The rate is 8% on the portion up to NIS 6,055,070 and 10% on amounts above that threshold. These rates apply regardless of how many other properties the foreign buyer holds elsewhere.

No access to the single-residence capital gains exemption: Mas Shevach applies to both Israeli and foreign residents, but the rules diverge significantly. As a non-resident, you are not entitled to the key exemptions available to Israeli tax residents — most notably, the full exemption on the disposal of a sole residential home.

Proof of no foreign property: Under a 2021 reform, foreign residents seeking to access certain benefits must provide evidence that they hold no other residential property abroad, typically by producing a foreign tax certificate. Failure to supply this documentation results in the highest applicable purchase tax brackets applying automatically.

Arnona is equal for all: While foreign buyers face higher Mas Rechisha rates than Israeli residents, ongoing charges such as Arnona are levied on the same basis for all occupants regardless of nationality.

Reporting obligations and double taxation: Buyers from countries operating global income tax systems — such as France, Germany, the United States, or Australia — may be required to disclose Israeli property purchases, rental income, and capital gains to their home country’s tax authority as well as to the Israel Tax Authority. Israel has entered into double taxation treaties with numerous countries, which can reduce or eliminate double taxation on the same income or gain. Always confirm the treaty position with a tax adviser versed in both Israeli law and the law of your country of residence.

Corporate or trust ownership: Acquiring property through a corporate vehicle rather than as an individual can materially alter your tax profile and may attract different purchase tax rates. Certain ownership structures may offer tax advantages, but corporate ownership also introduces additional compliance obligations. Specialist legal and tax advice should be obtained before adopting any such arrangement.

The most common unexpected costs that foreign buyers encounter in Israel include being placed in the higher 8%–10% purchase tax bracket, unexpectedly elevated Arnona based on the property’s zone and size, a betterment levy triggered by planning decisions, and mortgage add-on costs such as valuation and insurance fees. Engaging an Israeli property lawyer and a tax adviser with cross-border experience before signing any agreement is strongly recommended. Refer to the Israel Tax Authority for current rates and treaty information.

How do I apply for or report property taxes in Israel? Step-by-step process

1. Engage a qualified Israeli property lawyer before signing any purchase agreement. Your lawyer will assess your residency status, calculate the anticipated Mas Rechisha, and manage the submission process on your behalf.
2. Sign the purchase agreement (Chozeh Mecher). The signing date triggers the statutory deadlines for reporting and paying purchase tax.
3. File Form 7000 with the Israel Tax Authority within 30 days of signing the purchase agreement to declare the transaction and the agreed price. Your lawyer will typically handle this step.
4. Pay the Mas Rechisha (purchase tax) within 60 days of the purchase date. Payment is made directly to the Israel Tax Authority. Registration of the property cannot take place until the tax has been settled in full.
5. Register the property in the land registry (Tabu). Once a purchase tax clearance receipt has been obtained, your lawyer will attend to registration of the ownership transfer at the Israeli Land Registry.
6. Register for Arnona (municipal property tax) with your local municipality. The Arnona account must be transferred into your name from the date you take possession of the property. Bring ownership documentation, identity documents, and the possession transfer agreement to the municipal office.
7. If you are renting out the property, select your preferred rental income tax route (the full exemption, the 10% flat tax, or the marginal rate with expense deductions) and comply with annual reporting obligations. Non-residents may be required to appoint an Israeli tax representative.
8. If you sell the property, your lawyer must notify the Israel Tax Authority within 30 days of signing the sale agreement. Mas Shevach (capital gains tax) must be assessed and, where applicable, paid before the transfer of ownership can be completed.

Frequently asked questions: property taxes in Israel

Do I pay capital gains tax if I sell my Israeli property as a non-resident?

Since 1 January 2014, substantial changes have governed the capital gains tax rules in Israel. Israeli residents can access exemptions in specific circumstances — principally where they own only one residential property and have held it for a minimum of 18 months. Non-residents are generally ineligible for these exemptions and are liable to the full 25% capital gains tax on any profit realised from a property sale. That said, non-residents who purchased their property before 2014 may qualify for the Linear Rate, under which only the gain attributable to the period from that date is taxed. Consult a qualified Israeli tax adviser and verify the current rules with the Israel Tax Authority.

Can I deduct mortgage interest on rental income in Israel?

Whether mortgage interest is deductible depends on the rental taxation route you select. Under the 10% flat tax on gross rental receipts, no deductions of any kind are permitted. If instead you elect to be taxed at the marginal income tax rate, taxable income is arrived at by deducting qualifying expenses from gross receipts, and allowable costs include depreciation, building insurance, municipal charges, management fees, maintenance, and repairs. Mortgage interest may also be partly deductible under the marginal rate route, but the applicable rules are detailed — always seek guidance from a qualified Israeli accountant before making assumptions.

Is there a wealth tax on property in Israel?

No. Israel does not levy an annual wealth tax or net-worth tax on property holdings. The only recurring property-related charge is Arnona (municipal tax), which is calculated by reference to the property’s floor area, location, and use classification — not its market value. Israel imposes no estate or inheritance tax, and there is no annual tax on property values of the kind that exists in certain European countries.

Do foreign nationals face any restrictions on buying property in Israel?

Foreign nationals can generally purchase real estate in Israel, but they are subject to higher Mas Rechisha (purchase tax) rates than Israeli residents, typically starting at 8% and rising to 10% on higher-value properties. There are no blanket ownership prohibitions for most nationalities, though certain categories of land — such as state-owned or Jewish National Fund land — may carry specific restrictions. Legal advice tailored to your nationality and individual circumstances is essential before proceeding.

What is the purchase tax rate for new immigrants to Israel (Olim)?

The Israeli government announced significant amendments to the purchase tax framework for new immigrants (Olim), including a meaningful reduction in the applicable rate, effective from 15 August 2024. These changes are intended to broaden access to the benefit and offer more meaningful support to new Olim embarking on home ownership in Israel. Eligibility lasts for seven years from the date of Aliyah and is restricted to a single residential property used as the Oleh’s primary home. The benefit is subject to a cap for high-value properties. Always verify the current rates with the Israel Tax Authority, as thresholds are revised periodically.

Who pays Arnona — the owner or the tenant?

Arnona is the responsibility of the occupant rather than the legal owner. In a tenancy, this means the tenant pays Arnona directly to the municipality unless the lease specifies a different arrangement. For short-term rentals and properties let through platforms such as Airbnb, the owner pays Arnona directly, since short-stay guests do not register with the local authority. Landlords should ensure the Arnona obligation is addressed explicitly in every lease agreement they enter into.

Is VAT charged when buying a second-hand apartment in Israel?

The standard VAT rate in Israel is 18% as of 1 January 2025. This applies primarily to new construction and commercial properties; second-hand residential sales conducted between private individuals remain free of VAT. Where you are purchasing from a developer or company, VAT at 18% will generally apply and is often incorporated into the quoted price — always clarify with the seller whether the advertised figure is inclusive or exclusive of VAT before proceeding.

Are the Israel property tax brackets updated every year?

Under ordinary circumstances, the Israel Tax Authority publishes revised Mas Rechisha thresholds each January, calibrated to the preceding year’s Central Bureau of Statistics Home Price Index. However, Israel has suspended all inflation-linked updates to purchase tax brackets for the period 2025–2027, including both Mas Rechisha thresholds and capital gains tax ceilings. Buyers should therefore not assume that the brackets will keep pace with rising property prices during this period. Always consult the Israel Tax Authority for the most current figures before entering into any transaction.