Taxes in Israel: Purchase tax 2023
The Israeli government has updated the tax rates for purchasing real estate for the year 2023. The new tax rates will be effective from January 16th, 2023, until January 15th, 2024. When purchasing property in Israel, the buyer is required to make a one-time payment for the purchase tax. The amount of tax depends on the property's value.
The new tax rates apply to both the exemption for a single apartment and for apartments purchased for investment purposes. However, commercial and other non-residential properties, including land plots, are not subject to updated tax rates. The tax rate remains fixed at 6%.
It is important to note that the tax exemption applies only to residents of Israel. If you are a non-resident of Israel or a citizen living abroad, you will not be eligible for the tax exemption and will be taxed according to the rates for additional apartments.
However, if you have plans for making Aliyah or returning to Israel, you may be eligible for a tax refund.
New Olim are entitled to a tax discount when purchasing real estate in Israel for a period from one year before the aliyah to up to seven years after. However, in most cases, this discount is only beneficial for properties valued over $1.5 million.
Below are the updated tax rates for the purchase of a single residential apartment in Israel, effective from January 16th, 2023:
First or single apartment:
Up to NIS 1,919,155 - exempt from tax.
On the difference between NIS 1,919,155 and NIS 2,276,360 (compared to NIS 1,805,545 to NIS 2,141,605 in 2022) - 3.5%.
On the difference between NIS 2,276,360 and NIS 5,872,725 - 5%.
On the difference between NIS 5,872,725 and NIS 18,416,900 - 8%.
On the difference above NIS 18,416,900 - 10%.
Up to NIS 5,872,725 - 8%.
On the difference above NIS 5,872,725 - 10%.
Compared to the tax rates of the previous year, the exemption threshold for the first apartment has increased from NIS 1,840,822 to NIS 1,919,155. The tax rates for land rights and the purchase of a single apartment have been adjusted upwards to reflect the increase in the cost of living. The tax rates for additional apartments remain unchanged.
You can use this purchase tax calculator to calculate your tax and other expenses.