UK residents buying in Israel: SA106, capital gains tax, the 2019 protocol, and the Israeli side
A UK resident can buy property in Israel freely, with no exchange control at home and no residency requirement in Israel. According to Semerenko Group’s CRM, buyers from the United Kingdom are our second largest group from abroad (94 client records, 18 October 2026), asking mostly for Tel Aviv, Jerusalem, Beit Shemesh and Netanya. What differs is the tax treatment at home: UK tax on the Israeli rent, UK capital gains tax when you sell, the 2019 UK-Israel treaty protocol, and, for new arrivals in the UK, the four-year foreign income and gains regime that replaced the remittance basis in April 2025.
What is different for a buyer from the United Kingdom
Tax at home
- Rent. UK residents normally pay UK tax on foreign income, including rent from an overseas property (GOV.UK); it goes on the SA106 foreign pages of the Self Assessment return, where foreign tax credit relief for Israeli tax is claimed (GOV.UK SA106).
- New UK residents. The remittance basis was abolished from 6 April 2025; a qualifying new resident can claim relief on foreign income and gains for up to four consecutive tax years (HMRC helpsheet HS266), if they had at least ten years as a non-UK resident first (GOV.UK, Published 6 April 2025). Israeli rent and gains in those years are the case to check with an adviser.
- Selling later. A UK resident pays capital gains tax on a gain from property abroad. The rates for 6 April 2025 to 5 April 2026 are 18% and 24% (GOV.UK rates, Rates for 6 April 2025 to 5 April 2026), with an annual exempt amount of GBP 3,000 (GOV.UK, Annual exempt amount 2025 to 2026); from 6 April 2026 the rates stay 18% for basic-rate and 24% for higher and additional-rate taxpayers (GOV.UK). Israeli tax on the same gain is credited under the treaty.
- Treaty. The 2019 protocol to the UK-Israel double taxation convention was signed on 17 January 2019 and entered into force on 28 October 2019 (GOV.UK Israel tax treaties, Last updated 1 November 2019); it applies in the UK from 6 April 2020 for income tax and capital gains tax (GOV.UK, Last updated 1 November 2019).
Documents
- Apostille. The UK has been a party to the Hague Apostille Convention since 24 January 1965 (HCCH status table), and Israel since 1978, so a UK notarised power of attorney needs an apostille from the Legalisation Office, which attaches it when the signature, stamp or seal matches its records (GOV.UK Get your document legalised). No consular legalisation is needed.
- Power of attorney and identity. Your Israeli lawyer prepares the power of attorney; you sign before a UK notary (or at the Israeli embassy), add the apostille, and send passport copies and proof of address. The Israeli bank asks for the paper trail of the purchase money.
Money transfer
- Pounds are converted to shekels by your bank or a transfer service; the spread is the main cost. The Israeli lawyer’s trust account receives the staged payments. Compare routes with the tools above before the first transfer.
What is the same for every buyer from abroad
Anyone can own an apartment in Israel; there is no citizenship or residency requirement for buying a home. Three things decide what a buyer from abroad pays and can borrow: the purchase tax bracket (set by whether the buyer is an Israeli resident, an oleh, or neither), the Bank of Israel lending ceiling, and the exchange rate on the day the money moves.
Purchase tax
| Buyer | Price band | Rate on that band |
|---|---|---|
| Israeli resident, only home | ₪0 to ₪1,978,745 | 0% |
| Israeli resident, only home | ₪1,978,745 to ₪2,347,040 | 3.5% |
| Israeli resident, only home | ₪2,347,040 to ₪6,055,070 | 5% |
| Israeli resident, only home | ₪6,055,070 to ₪20,183,565 | 8% |
| Israeli resident, only home | above ₪20,183,565 | 10% |
| Foreign resident, or an additional home | ₪0 to ₪6,055,070 | 8% |
| Foreign resident, or an additional home | above ₪6,055,070 | 10% |
| New immigrant (oleh), home bought within the benefit window | ₪0 to ₪1,978,745 | 0% |
| New immigrant (oleh), home bought within the benefit window | ₪1,978,745 to ₪6,055,070 | 0.5% |
| New immigrant (oleh), home bought within the benefit window | ₪6,055,070 to ₪20,183,565 | 8% |
Israel Tax Authority brackets for 16 January 2026 to 15 January 2027 as held in Semerenko Group’s fact registry, verified 2026-10-16. The oleh table above ₪20,183,565 is not in our registry; the Tax Authority directive governs. The tax is cumulative: each band is taxed at its own rate.
The brackets, the oleh benefit and a calculator that applies them are on the purchase tax page and in the purchase tax and closing-costs calculator.
Financing
Bank of Israel Directive 329 caps a housing loan at 75% of value for a sole dwelling, 70% for a replacement dwelling and 50% for an investment dwelling (Bank of Israel, verified 2026-10-16). A buyer who is not an Israeli resident is generally financed inside the 50% ceiling; the rest is equity. Repayments on all debt may not exceed 50% of income. The Bank of Israel policy rate is 3.25% and prime is 4.75% (registry, 2026-10-18). Details and the bank process for buyers abroad: mortgages for foreign buyers and the foreign buyer mortgage guide; capacity by income and equity: mortgage capacity and budget planner.
Worked example in pounds sterling
| Item | ILS (pounds sterling at the Bank of Israel rate) |
|---|---|
| Purchase price | ₪2,500,000 (£607,000) |
| Purchase tax as a foreign resident (8% band) | ₪200,000 (£48,600) |
| Purchase tax if the buyer were a new immigrant (oleh) inside the benefit window | ₪2,606 (£633) |
| Purchase tax if the buyer were an Israeli resident buying an only home | ₪20,538 (£4,990) |
| Largest bank loan at the 50% ceiling for an investment or non-resident purchase (Bank of Israel Directive 329) | ₪1,250,000 (£303,000) |
| Equity the buyer brings (price minus the 50% loan) | ₪1,250,000 (£303,000) |
| Semerenko Group buyer fee, 2% plus 18% VAT | ₪59,000 (£14,300) |
| Cash needed before lawyer, registration and bank fees | ₪1,509,000 (£366,000) |
Bank of Israel representative rate of 2026-10-16: 1 GBP = ₪4.1194. ₪2,500,000 is the median purchase budget our clients abroad gave us (Semerenko Group CRM, October 2026). Lawyer, registration, appraisal and bank fees are not included because they are quoted per deal; enter them in the closing-costs calculator.A bank may lend less than the ceiling. The ceiling for an Israeli resident’s only home is 75%.
Money transfer and the Israeli bank
The money for a purchase reaches the seller through an Israeli bank or the lawyer’s trust account. Israeli banks ask for source-of-funds documents before accepting a large transfer from abroad; our source of funds letter generator prepares the explanation, and the SWIFT wire cost estimator and FX break-even calculator show what the transfer and the exchange rate cost. Conversions on this page use the Bank of Israel representative rate of 2026-10-16; the rate you get is set by whoever converts the money.
Where buyers from the United Kingdom ask us to search
Semerenko Group’s CRM holds 94 client records from the United Kingdom (18 October 2026). Of the 87 who named a place, the most requested were Tel Aviv (16), Jerusalem (15), Beit Shemesh (14), Netanya (10), Kiryat Gat (Carmei Gat) (5). 35 came to buy or invest and 51 to rent, including short stays. The median purchase budget of the 23 who gave one was ₪2,500,000. Counts only; no personal details are published. Method and the full table: Anglo Buyer Demand Index.
Community matters as much as price for most families: see the neighbourhoods by community (hashkafa) index.
How buying from the United Kingdom works with us
- Brief. Budget in your currency and in shekels, the cities or neighbourhoods, rooms, must-haves, and your timeline. We check the budget against recorded sales before searching.
- Search and options page. We search every listing source and build a private options page with prices, sizes, photos and the facts we could verify. You choose what to see.
- Viewings. In person when you are in Israel, by video when you are not. The buying process page explains each step.
- Offer, lawyer, contract. An Israeli real estate lawyer represents you; a notarised and apostilled power of attorney lets the lawyer sign for you when you are abroad. Guide: the purchase lawyer.
- Financing and transfer. Mortgage approval if you borrow, then the staged payments through the lawyer’s trust account.
- Tax and registration. Purchase tax is reported and paid after signing; the property is registered in the Land Registry (Tabu) or with the relevant registry. Guide: registering property in Israel.
Our buyer fee is 2% plus VAT on a purchase, paid at closing; everything else we do before that is free. Full terms: how Semerenko Group gets paid.
Frequently asked questions
Can a UK resident buy a flat in Israel?
Yes. There is no Israeli residency requirement and no UK exchange control. A non-resident pays Israeli purchase tax at the foreign-resident brackets and is generally financed by Israeli banks within the 50% Bank of Israel ceiling for investment purchases.
Do I pay UK tax on rent from an Israeli flat?
Normally yes: UK residents pay UK tax on foreign income, declared on the SA106 foreign pages, with foreign tax credit relief for Israeli tax paid. New UK residents may qualify for the four-year foreign income and gains regime that replaced the remittance basis on 6 April 2025.
How much Israeli purchase tax does a UK buyer pay on a ₪2,500,000 apartment?
As a foreign resident, ₪200,000 at the 8% first band in force until 15 January 2027 (Israel Tax Authority brackets in Semerenko Group’s registry), about £48,600 at the Bank of Israel rate of 2026-10-16.
What UK capital gains tax applies when I sell the Israeli property?
A UK resident pays CGT on the gain at 18% or 24% depending on their income band (rates for 2025 to 2026 and from 6 April 2026), after the GBP 3,000 annual exempt amount, with credit for Israeli tax under the UK-Israel treaty.
Related pages
- Buying property in Israel from abroad: remote guide
- Can a foreigner own property in Israel?
- Mortgages for foreign buyers
- Documents to buy property in Israel
- Non-residents buying property in Israel
- All international buyer hubs
Sources
- Israel Tax Authority purchase tax directive (fact registry), as of 2026-10-16
- Bank of Israel Directive 329 (fact registry), as of 2026-10-16
- Bank of Israel representative exchange rates, as of 2026-10-16
- GOV.UK Tax on foreign income
- GOV.UK Self Assessment: Foreign (SA106), as of Last updated 6 April 2026; forms for tax year 2025 to 2026
- GOV.UK HS266 Foreign income and gains (FIG) regime (2026), as of Updated 18 May 2026
- GOV.UK Check if you can claim the 4-year FIG regime, as of Published 6 April 2025
- GOV.UK Capital gains tax rates and allowances, as of Rates for 6 April 2025 to 5 April 2026
- GOV.UK Capital Gains Tax rates, as of covers from 6 April 2026; no updated date shown
- GOV.UK Israel: tax treaties, as of Last updated 1 November 2019
- HCCH Status table, Convention 41
- GOV.UK Get a document legalised
- Semerenko Group CRM, client counts only, as of 2026-10-18
This is general information, not legal or tax advice; confirm with a licensed professional.
Verified 2026-10-18 by Chaim Semerenko, Semerenko Group; brokerage under broker of record Pinchas Menachem Reis, licence 324150.
