By
Nicole Levin
In every real estate transaction the issue of purchase tax must be dealt with. In certain cases one may be exempt from purchase tax, but the relevant documentation must still be filed with the tax authorities. This tax must be paid by the purchasers within 50 days of the signing of the contract and
late payment can incur fines.
Purchase Tax Levels for the Period Between 16/1/2010 and 15/1/2011 Single Residential Apartment or House
This is for the purchase of a residential apartment or house when the property purchased is the purchaser’s only apartment in Israel. This includes a situation where a new apartment or house is purchased instead of the existing one. Even though the existing property has not been sold yet the tax authorities give the purchaser 24 months to sell his or her existing apartment.
For the portion of the price until 1,084,935 NIS | 0% |
For the portion of the price from 1,084,935 NIS until 1,524,770 NIS | 3.5% |
For the remaining portion of the price above 1,524,770 NIS | 5% |
Additional Residential Apartment
This is when the purchaser purchases another apartment or house without selling his or her existing one within 24 months of the purchase on the new property.
For the portion of the price until 923,070 NIS | 3.5% |
For the remaining portion of the price above 923,070 NIS | 5% |
New Olim
This is for new olim within the first 7 years after making aliya. This partial exemption is only given once.
For the portion of the price until 1,393,220 NIS | 0.5% |
For the remaining portion of the price above 1,393,220 NIS | 5% |
See example below
Notes
- A purchaser buying an apartment before he or she has sold the previous apartment must sell the previous apartment within 24 months of the date on which he or she purchased the new apartment. Should this not happen the purchase tax will be the higher tax for people purchasing an additional apartment.
- Purchase tax for foreign residents is the same as purchase tax for second apartments. However should these purchasers have citizenship from a country signed on a special treaty with Israel about double taxation then their purchase tax will be the same as an Israeli citizen. Examples of such countries are : The United States, England, France, Australia, Holland, Japan etc.
- Purchase tax for a store, a storage unit or a plot of land is 5% of the entire price. There is no discount for Olim.
For example below please find the calculation of the purchase
tax in each of the above instances for a 1,850,000 NIS apartment
or house:
tax in each of the above instances for a 1,850,000 NIS apartment
or house:
Single Residential Apartment or House
- In the first tax bracket (0%) we have 1,084,935 NIS
= 0% of 1,084,935 = 0 NIS
- In the next tax bracket (3.5%) we have 438,835 NIS (1,524,770 – 1,084,935 = 439,835).
= 3.5% of 439,835 = 15,394 NIS
- In the last tax bracket (5%) we have 325,230 NIS (1,850,000 – 1,524,770 = 325,230).
= 5% of 325,230 = 16,261 NIS
- TOTAL = 0 + 15,394 + 16,261 = 31,655 NIS
Additional Residential Apartment or House
- In the first tax bracket (3.5%) we have 923,070 NIS
= 3.5% of 923,070 = 32,307 NIS
- In the last tax bracket (5%) we have 873,500 NIS (1,850,000 – 923,070 = 926,930).
= 5% of 926,930 = 46,346 NIS
- TOTAL = 32,301 + 46,346 = 78,653 NIS
New Olim
- In the first tax bracket (0.5%) we have 1,393,220 NIS
= 0.5% of 1,393,220 = 6,966 NIS
- In the last tax bracket (5%) we have 456,780 NIS (1,850,000 – 1,393,220 = 456,780).
= 5% of 456,780 = 22,839 NIS
- TOTAL = 6,966 + 22,839 = 29,805 NIS
About the Author:
Nicole Levin Law Offices was established in 1990 by Nicole Levin. Born and raised in New York, she immigrated to Israel in 1977 and graduated from Bar Ilan University Law School in 1982. After being admitted to the Israeli Bar in 1983, Ms. Levin worked in commercial law firms in Tel Aviv before founding her own firm. The firm has offices in Beit Shemesh and Modiin.
Back to resources
