ITA Implementation Order 5/2026 sets out an online process through which individuals can open the relevant tax file and report and pay tax on specified categories of rental income. It describes reporting tracks, supporting documents and follow-up of unpaid balances. Its procedures should not be confused with a new tax on every landlord or a change in the legal character of every rental activity.
Update checked 23 October 2026: the order distinguishes file 95 for eligible residential rental cases from file 94 for cases requiring annual returns. A 90-day unpaid-balance trigger can create an annual-return obligation; it does not itself turn passive rent into business income. The 8 March 2026 addendum allows a representative’s declaration as an alternative to the landlord’s lawyer-witnessed affidavit when no lease is available.
Three Procedures to Check Before Filing
- Portal scope: the order covers individuals using the section 122 residential rental track, the qualifying rent-paid offset track, and business-property rental reporting. It does not by itself require every landlord, including every fully exempt residential case, to open the same file.
- Documents: for reporting from tax year 2024 onward, provide the lease or the permitted substitute. Following the 8 March addendum, a missing lease can be replaced by the landlord’s affidavit signed before a lawyer or by the representative’s declaration on the landlord’s behalf.
- Unpaid balances: for a taxpayer otherwise not required to submit annual returns, a debt not paid in full within 90 days of reporting triggers file 94 and annual-return duties. That period is an enforcement trigger, not a new statutory payment deadline.
Which Rental-Income Tracks the Portal Covers
Choose the tax treatment before the filing route. The rental-income tax comparison explains exemption calculations, the reduced-rate option and ordinary treatment; a portal file number does not choose the cheapest lawful route for you.
The portal brings several individual rental-income reporting processes into one interface. Users must still identify the relevant tax treatment and whether they are required to file an annual income-tax return.
The order lists three uses: the section 122 residential-rental track; the qualifying offset for someone renting out a sole home while paying eligible rent; and reporting business-property rent, which requires an annual return. An individual already required to file annual returns uses file 94 rather than file 95. The file number does not by itself decide whether income is business income.
Can the System Really Force Compliance?
The order describes automated monitoring of the reported debt, SMS reminders and follow-up procedures. It is an implementation instruction, not evidence that human review or all delays in tax collection have been eliminated.
If a reported debt remains wholly or partly unpaid, the system sends reminders after 30 and 60 days. After 90 days without full payment, a taxpayer otherwise outside annual filing is assigned file 94, requiring annual returns. Existing annual filers are subject to collection procedures. The order does not say that the rental income automatically becomes business income.
Documentation Requirements Have Tightened Significantly
The reporting procedure requires documents identifying the rental arrangement. The requirement supports the report; it does not establish that disputes or inaccurate reports are impossible.
Attach the lease for the relevant rented properties. If no lease is available, the original order permits an affidavit signed before a lawyer; the addendum dated 8 March 2026 also permits a representative’s declaration on the landlord’s behalf. The substitute must identify the property, landlord and tenant, rental period and monthly rent. The documentation rule applies from tax year 2024 onward.
| Procedure | What the Order Provides | Important Scope |
|---|---|---|
| Reporting interface | Online reporting for specified individual rental tracks | The order does not create one universal track for every landlord |
| Supporting documents | Lease or permitted substitute from tax year 2024 | Lawyer-witnessed affidavit; representative declaration added on 8 March 2026 |
| Payment reminders | SMS after 30 and 60 days if the reported debt is not fully paid | These reminders do not replace the legal payment due date |
| Non-payment after 90 days | File 94 for a taxpayer otherwise outside annual filing | Annual-return duties; no automatic business-income reclassification |
| Dates and prior years | Order dated 17 December 2025; addendum 8 March 2026 | Document rule from 2024; portal permits selection of up to six tax years |
Three Steps Before You File
- Prepare the rental documents: use the lease where available. If it is missing, use the landlord’s affidavit signed before a lawyer or the representative’s declaration permitted by the 8 March addendum, including all required rental details.
- Identify your track and filing status: check eligibility for the relevant residential-rental option and whether you already owe an annual return. Commercial-property reporting and annual-filer status must not be reduced to a simple passive-versus-business label.
- Pay by the applicable legal due date. Do not treat the portal’s 90-day escalation rule as permission to defer payment for 90 days after filing; retain the report and payment confirmation.
Glossary
- Implementation Order 5/2026: an ITA administrative instruction dated 17 December 2025 and published in February 2026, describing the online rental reporting and payment process. Addendum 1 is dated 8 March 2026.
- ITA (Israel Tax Authority): The government body responsible for tax collection, akin to the IRS in the United States or HMRC in the UK.
- File 94: in this procedure, an income-tax file requiring annual returns. It can apply to an existing annual filer, a business-property rental case, or the specified unpaid-balance escalation. Opening it does not alone establish that residential rent is business income.
- Affidavit in this procedure: a statement signed before a lawyer, used when a lease is unavailable. Since the 8 March addendum, the representative’s declaration is another permitted substitute.
Methodology
This report was checked against the full three-page ITA order and the signed one-page addendum dated 8 March 2026. The 2024 date concerns the supporting-document requirement; the order also allows selection of up to six tax years and directs earlier cases to the assessment office.
Frequently Asked Questions
Q: Does this new system apply to rental income I earned in the past?
A: The lease-or-substitute requirement applies from tax year 2024 onward. The portal allows selection of up to six tax years, with earlier years handled through the assessment office. This does not mean every person with rental income for 2024 has the same reporting obligation.
Q: What happens if I don’t have a formal written contract with my tenant?
A: Provide an affidavit signed before a lawyer or, under the 8 March 2026 addendum, a declaration by your representative on your behalf. Include the property details, parties, rental period and monthly rent.
Q: What does opening file 94 mean?
A: It means annual income-tax returns are required under this procedure. It does not automatically transform the nature of rental income into business income. The order specifies the file-opening consequence for an otherwise non-filing taxpayer whose reported debt remains unpaid in full after 90 days.
Q: Can I still just pay the 10% tax and be done with it?
A: The section 122 option remains subject to its own eligibility and payment rules. Use the relevant portal track and supporting documents. An annual filer reports the income through the annual-return process and pays within the overall return liability. The 90-day escalation rule is not the statutory due date for the 10% tax.
Keep Reporting Status and Payment Deadlines Clear
Check the correct tax treatment, submit the required documents and pay on time. Annual-return duties and the legal character of rental income are separate questions; neither should be inferred solely from the portal’s file number.
What the Digital Procedure Is Intended to Improve
The ITA describes the system as a way to improve access to services and reporting. More consistent documents and payment follow-up may support administration, but the order does not establish a measured increase in revenue or prove that rental-tax loopholes have been eliminated.
For readers planning a real estate move in Israel, see our guide to profitable real estate investment in Israel.
Considering a purchase, sale, rental or investment in Israel? Speak with the Semerenko Group team for personal guidance.
Is this page useful?
