Purchase Tax

Purchase Tax in Israel

The real estate taxation law in Israel establishes the obligation to pay purchase tax when purchasing a right in real estate. Purchase tax regulations state that purchase tax will apply at different rates, depending on the type of real estate being purchased.

If a right in real estate that is not a “residential apartment” was purchased, then a purchase tax of 6% will apply. If real estate intended for construction was purchased and the construction permit was granted within 24 months, then a purchase tax of 5% will apply.

If a right in real estate that is a “residential apartment” has been purchased, purchase tax rates have been determined, at different rates. These rates vary according to the value of the right purchased, and mainly – according to the question of whether it is a single apartment of the buyer or not. If it is a single residential apartment (in accordance with the conditions established by law), the purchase tax rates are lower, while if it is a residential apartment that is not a single apartment – the purchase tax rates will be higher.

In the Israeli law, there are benefits in purchase tax for new immigrants, the disabled, the blind, the injured or family members of soldiers who perished in wars.

The eligibility for these benefits must be carefully examined. If you believe that you may be eligible for a benefit, you should consult with a tax advisor.