Purchase Taxation under the Israeli Land Law

Purchase Taxation under the Israeli Land Law

 

Buying a Real Estate Property in Israel

In order to buy a property in Israel there are several issues that the buyer has to tackle with. The first is the purchasing tax that every real estate property subjects to. Anyhow there are certain types of buyers under the Israeli land law who have different tax rates which are hereunder detailed:

Foreign Resident

Foreigners that wish to buy an asset in Israel need to define their status by the following terms:

Technical Term – Foreigner considers as such If they were in Israel less than 183 days in a certain taxation year and/or less than 30 days of the discussed taxation year and less than total of 425 days during the last 3 years (including the discussed taxation year).

Fundamental Terms – These terms relate to some secondary terms that overcome the technical term in a case that the technical as a basic term is followed. This means that in a case that the technical term is not fulfilled there is no need to follow the fundamental one, but if the technical term exists only the fundamental term will determine if the person is a foreigner or not. These terms are as follows:

  1. Regular residential Location
  2. Occupational Location
  3. Location of Financial interests
  4. The location of Social Interests such as fraternities, institutions etc.

New Immigrant – in a case that the buyer becomes an Israeli resident within one year from the purchase date, he will pay less than a foreign resident.

Tax Rates

Status From To Rate Tax Accrued Sum
Israeli Resident 0 1,623,320 0.00% 0 0
Israeli Resident 1,623,321 1,925,460 3.50% 10,575 10,575
Israeli Resident 1,925,461 4,967,445 5.00% 152,099 162,674
Israeli Resident 4,967,446 16,558,150 8.00% 927,256 1,089,930
Israeli Resident 16,558,151 Unlimited 10.00%    
New Immigrant 0 1,759,310 0.50% 8,797  
New Immigrant 1,759,311 Unlimited 5.00%    
Foreigner 0 4,967,445 8.00% 397,396  
Foreigner 4,967,446 Unlimited 10.00%