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Israel – Property Taxes

  1. Property Tax: In Israel, property tax is paid annually and is based on the estimated value of the property. It ranges between 0.5% to 1% of the property’s value, with a maximum rate of 2%.

  2. Capital Gains Tax (CGT): CGT is applicable when a property is sold for a profit. The CGT rate is 25% for residents and 35% for non-residents.

  3. Inheritance Tax: Inheritance tax is not levied in Israel.

  4. Gift Tax: Gift tax is levied on gifts received from family members. The rate ranges from 0% to 50% depending on the value of the gift and the relationship between the donor and recipient.

  5. Tax on Property Income

    : Income generated from rental property is taxed in Israel. The rate is dependent on the rental income and is subject to personal income tax rates.

Tax Advantages of Buying a House in Israel

  1. Homeowner Tax Deduction: Israeli homeowners are eligible for a tax deduction of up to 20% of the mortgage interest paid.

  2. Tax Exemption on Capital Gains: Israeli residents who sell their primary residence can be exempt from CGT if they meet certain criteria.

  3. Tax Credits for Housing Improvements: Homeowners in Israel can receive tax credits for making energy-efficient improvements to their property.