At the moment, both the citizens of Israel and the citizens of other states, purchasing real estate in Israel, must pay a tax on the purchase of real estate, which depends on the price of the object being acquired. In accordance with the amendments to the law on real estate taxation, tax concessions for the purchase of the first apartment were adjusted.
The tax upon the purchase of the first and only apartment varies (from January 18, 2015) in the following way:
- Up to the price of € 363,490,96 (ILS 1,568,800) – tax is not charged;
- From the price from € 363,490,96 to 431,145,04 (ILS 1,568,800 – 1,860,790) – a tax of 3.5% is charged;
- From the price of € 431,145,04 to 1,112,300,18 (ILS 1,860,790 – 4,800,605) – 5% tax is levied;
- Prices from € 1,112,300,18 to 3,707,666,88 (ILS 4,800,605 to 16,002,015) – 8% tax is levied;
- 100% tax is charged on prices from € 3,707,666,88 (ILS 16,002,015) and higher.
The tax upon the purchase of the second and subsequent apartments (for the purpose of investment), (from June 24, 2015, and until December 31, 2020):
- To € 1,112,300,18 (ILS 4,800,605) – 8% tax is levied;
- 10% tax is charged on prices from € 1,112,300,18 (ILS 4,800,605) and higher.
It must be noted
In accordance with the change in the tax law for the purchase of real estate, which entered into force on June 24, 2015, a non-resident of Israel, purchasing the first and only real estate in Israel, will not be able to use a special rate and will be required to pay tax for a single apartment, as in cases when buying a second apartment for a resident of Israel.
For a new immigrant, the calculation of the tax on the purchase of real estate will be different:
- If the price of an apartment does not exceed € 394,030,18 (ILS 1,700,605) – the purchase tax will be 0.5%;
- If the price of the apartment exceeds € 394,030,18 (ILS 1,700,605) – the buyer will pay a tax of 5%.
When purchasing agricultural land tax will be calculated according to the following scheme:
- If the purchase price does not exceed € 62,480,22 (ILS 269,660) – the tax will be 0.5%;
- If the price of land exceeds € 62,480,22 (ILS 269,660) – the buyer will pay a tax of 5%.
Tax on the Growth of Property Value
Tax on the rising cost of real estate is introduced when selling real estate in Israel, or when renting the property for more than 10 years. The tax is imposed on the increase in value, from which the seller has benefited, as a result of rising real estate prices from the moment of buying the property to its sale.