Mas shevach is Israel’s land appreciation tax. The calculation depends on acquisition history, the asset, eligible costs and relief. A 25 percent rate applies to certain taxable real gains, but it is not a universal rate or a ceiling on every seller’s liability. This page is the wiki entry for the topic and sits inside our guide to selling property in Israel.
What is mas shevach?
Mas shevach is the national tax on the gain between what you paid for a property and what you sell it for, collected by the Israel Tax Authority. Four terms carry the page. The real gain is determined after the statutory basis, expense, depreciation and inflation calculations. Historical taxable inflationary amounts may also matter. The madad is the consumer price index used to restate your old purchase price in current shekels. For an eligible qualifying residential dwelling, the preferential linear calculation apportions real gain by ownership days around 1 January 2014; it does not measure when the market gain actually arose. The single-apartment exemption is a separate route for an eligible seller, including a foreign resident who satisfies the prescribed evidence requirement and the other conditions.
How is the real gain calculated?
Start with the statutory sale and acquisition values, allowable expenses, depreciation and the applicable index adjustments. The contract price is important evidence, but the full legal calculation determines the taxable gain.
Which two prices does the tax office start from?
The sale price from your contract and the price on your original purchase agreement. Keep the old contract: it anchors the calculation, and the Tax Authority will not take your word for the number.
Why does your purchase price grow before you are taxed?
The calculation uses the known CPI at the statutory acquisition, expense and sale dates. Inflationary amounts through 31 December 1993 can be taxable; later inflationary amounts are treated differently. You take your real index factor from the Israel Tax Authority madad tables, not from a guess.
Which costs come off the gain?
Purchase tax (mas rechisha), agent commission, lawyer fees on the purchase and the sale, genuine improvement and renovation work, and any betterment levy you paid. Routine repairs do not count; capital improvements that add lasting value do. Keep invoices and payment evidence. If original documents are missing, seek duplicates and ask whether a defined alternative-evidence procedure applies; the deduction still requires adequate proof and legal eligibility.
What rate applies?
For an eligible qualifying residential dwelling acquired before 1 January 2014, the preferential linear calculation apportions real gain by ownership days: the pre-transition portion is exempt and the later portion is taxed at 25 percent under that rule. Other assets and acquisition periods follow different calculations, and surtax may also apply. The split follows time held, not when the value actually rose, so a longer pre-2014 holding means a bigger exempt slice. The pre-2014 angle has its own page: the linear mas shevach calculation for pre-2014 holdings.
What does a real sale cost in mas shevach?
The figures below illustrate a qualifying dwelling eligible for preferential linear treatment, with all stated costs assumed allowable and no other adjustment or surtax. They simplify indexing and timing and do not include every rule that may matter to a real sale.
You bought a Tel Aviv flat in January 2010 for NIS 1,500,000 and sell it in January 2026 for NIS 3,500,000. Assume the price index rose 40 percent over your holding period. This is an assumption for the example, not a published figure. Along the way you paid NIS 75,000 purchase tax, about NIS 90,000 to an agent and lawyer on the sale, and NIS 60,000 for a kitchen and bath renovation. There is no betterment levy. Under those assumptions, the estimated tax is NIS 220,313.
Worked tax calculation
| Line | What it is | Amount (NIS) |
|---|---|---|
| 1 | Sale price | 3,500,000 |
| 2 | Original purchase price | 1,500,000 |
| 3 | Indexed purchase price (line 2 raised by the 40 percent assumption) | 2,100,000 |
| 4 | Deductible costs (purchase tax, fees, renovation; kept unindexed here for simplicity) | 225,000 |
| 5 | Nominal gain (line 1 minus line 2) | 2,000,000 |
| 6 | Real gain before the 2014 split (line 1 minus line 3 minus line 4) | 1,175,000 |
| 7 | Exempt under the linear split (4 of 16 holding years fall before 2014, so one quarter of line 6) | 293,750 |
| 8 | Taxable real gain (line 6 minus line 7) | 881,250 |
| 9 | Mas shevach due (25 percent of line 8) | 220,313 |
The nominal gain of NIS 2,000,000 is the number sellers fear, and it is the wrong one. Indexing and costs shrink it to a real gain of NIS 1,175,000, and the linear split leaves NIS 881,250 taxable, less than half of the headline figure. The bill of about NIS 220,313 is roughly 11 percent of the NIS 2,000,000 headline gain and roughly 6.3 percent of the NIS 3,500,000 sale price, not the 25 percent everyone braces for.
Who is exempt or taxed differently?
Does the single-apartment exemption remove the tax?
An eligible sole-dwelling sale can be exempt up to the statutory ceiling. Tax Authority instruction 1/2026, section 2(d) states the section 49A(a1) ceiling as ILS 5,008,000 for 2025-01-01 through 2027-12-31. All qualifying-dwelling, ownership, holding-period, prior-sale and residency-evidence conditions must be met; eligible foreign residents are not automatically excluded. Conditions and the ceiling change with budget laws, so read the single-apartment tax exemption page before you assume either way. If a sale exceeds the ceiling, proportional relief may remain available. If the exemption does not apply, the appropriate taxable calculation still depends on the property and acquisition history.
What about the pre-2014 linear split?
Preferential pre-2014 apportionment applies only where the qualifying-dwelling and other statutory requirements are satisfied. Non-residents may qualify for this calculation and may also qualify for a home-sale exemption with the required evidence. Confirm the law applicable on the sale date.
Do non-residents and heirs pay it?
A non-resident’s result depends on the property, acquisition date and available relief; preferential linear treatment is not automatic. Heirs who sell a long-held inherited home meet their own rules. See selling property in Israel as a non-resident and selling inherited property in Israel.
Is a betterment levy deductible?
A qualifying betterment levy paid in connection with the property can be an allowable expense in the Mas Shevach calculation, subject to the deduction rules. The levy itself has separate planning triggers, liability and payment rules.
Can the tax calculation be spread over several years?
The Tax Authority’s Form 7003 service allows a qualifying Israeli-resident individual seller to ask for tax on the real gain to be calculated as if the gain arose in equal portions over up to 4 tax years ending in the sale year, or the legally defined ownership period if shorter. The calculation adds each portion to the seller’s taxable income for that year. The service says to include Form 7003 with the sale declaration and that the service is free. The Tax Authority’s 2022 seller guide discusses the annual income-tax return; a later guide hosted by CallText describes the same filing exception. Annual returns are generally required for the relevant years, with an exception where the filing deadline has not yet passed. Income, rates and available credits affect the result, so a saving is not guaranteed. This is a calculation, not an instalment plan. A non-resident should ask an adviser whether a separate income-tax assessment route applies.
When do you report and pay?
The sale is generally reported to the Tax Authority within 30 days of the transaction; check which tax clearance the registering authority requires. The full picture of every tax, fee and clearance on a sale is in the guide to selling-property taxes in Israel. Do this before you sign:
- Find your original purchase contract and read the price off it.
- Pull the madad factor for your purchase month and sale month from the Tax Authority tables.
- Gather receipts for purchase tax, fees and capital renovations.
- If you owned before 1 January 2014, count your holding days before and after that date.
- Check first whether the single-apartment exemption wipes the tax out.
How can payment be deferred?
Self-assessed tax is ordinarily due within 60 days of the transaction. Under section 51, a qualifying deferral can extend the payment timing when none of these events has yet occurred by the usual deadline: possession is in the buyer’s hands or at the buyer’s disposal; more than 40% of the price has been paid or credited to the seller or placed at the seller’s disposal; or the seller has given the buyer or another person an irrevocable power to register the rights in the buyer’s name or at the buyer’s direction. The first applicable event can end the deferral. The Tax Authority must generally be notified within 14 days, and section 90A connects self-assessed payment timing to the notice deadline. Interest and indexation can accrue during a deferral. Check the actual dates and requirements with your tax adviser. This payment deferral is separate from spreading the tax calculation. See the Tax Authority’s 2022 seller guide and a later guide hosted by CallText.
What do the official sources say?
The Israel Tax Authority administers the tax and publishes the madad tables you need. The 25 percent rate, the indexing of purchase price and costs, and the 1 January 2014 linear split are described in the independent summaries listed under Sources below. A short question page also covers the basics: how capital gains taxes are handled when selling property.
When do you need a professional?
- A real estate tax lawyer or tax adviser should run your final figure in writing before you sign.
- Ask them to confirm your exact madad factor for your specific months, not a round number.
- Ask them whether the single-apartment exemption, the linear split or both apply to your holding.
- Ask them to confirm the status of the proposal to phase out the pre-2014 exemption.
Which tool can you use?
Use the Israel Tax Authority madad tables for the index factor. To see how tax and costs affect your total result, try our seller net proceeds calculator, and read what sellers keep in net proceeds.
Frequently asked questions
What is mas shevach?
It is Israel’s land appreciation tax. A 25 percent rate applies to certain taxable real gains, while acquisition history, deductions, relief, taxable historical inflation and possible surtax can change the result.
What is the capital gains tax rate in Israel for property?
There is no single rate for every property sale. A 25 percent rate is relevant to certain taxable real gains; the final amount depends on acquisition periods, eligibility for relief, allowable costs and other applicable tax rules.
How much tax do you pay when selling property in Israel?
It depends on your purchase price, the madad, your costs and when you bought. In the illustrative example above, a NIS 2,000,000 nominal gain produced about NIS 220,313 of mas shevach.
Is mas shevach the same as mas rechisha?
No. Mas shevach is paid by the seller on the gain. Mas rechisha is the purchase tax paid by the buyer, and it is a deductible cost for the seller who paid it when buying.
Can you avoid mas shevach?
A qualifying seller may receive a full or partial home-sale exemption. If that route does not apply, preferential linear treatment and deductions must each be tested under their own conditions; neither guarantees a reduction in every case.
Related pages
- Selling property in Israel
- Selling-property taxes in Israel
- The single-apartment tax exemption
- Linear mas shevach for pre-2014 holdings
- How to sell an apartment in Israel
- VAT when selling property in Israel
Sources
- Israel Tax Authority instruction 1/2026, section 2(d): the exemption ceiling amount and its period.
- PwC, Israel individual other taxes: https://taxsummaries.pwc.com/israel/individual/other-taxes
- Givati Law, capital gains tax in Israel: https://givatilaw.co.il/understanding-capital-gains-tax-in-israel/
- Nadlan Center, land appreciation tax guide: https://www.nadlancenter.co.il/article/413
- Israel Tax Authority, madad (consumer price index) tables.
- On this site: linear split, non-resident sellers and inherited property.
Next step: Want your own line-by-line gain figure before you list? Send us your purchase year, purchase price, and target sale price and we will sketch the real-gain math for you. This is general information, not legal or tax advice; confirm with a licensed professional.
