Linear Mas Shevach for Pre-2014 Properties

The linear calculation under Amendment 76 exempts the part of your gain that built up before 1 January 2014, by counting days. The full guide to mas shevach, with the rate, the real gain and every cost you can deduct, is here; this page answers one question: how much of your gain counts as pre-2014 when you bought before that date. The share built up before 1 January 2014 is tax free, and the share from that date onward is taxed at 25% on the real, inflation-adjusted part. A draft bill proposes phasing the benefit out, so the rule is not guaranteed to stay as it is.

What does “linear” mean for a pre-2014 property?

Linear means the law treats your gain as if it grew at an even rate across every day you owned the property. It does not ask how much of the profit arrived in 2009 and how much in 2021. It draws one line on the calendar, counts the days on each side, and applies those proportions to the whole real gain.

If you owned the property for 6,000 days and 3,000 of them fell before 2014, half of your real gain is treated as pre-2014 and exempt, and half is taxed at 25%. The real market history of those years is ignored. This is a deliberate simplification written into the Real Estate Taxation Law by Amendment 76.

Why is 1 January 2014 the line?

It is the date Amendment 76 took effect. Before that reform, an Israeli resident could often sell a residential apartment fully exempt once every four years, whatever its value. The reform tightened that exemption and added the linear method as a transition rule, so owners who had held property for years under the old regime would not lose their built-up exemption overnight.

That is why the pre-2014 portion is exempt: it is gain that accumulated while the old rules applied. The date is fixed in the statute and applies the same way to everyone, including non-residents.

How do you split the gain by days, step by step?

You split it by dividing your pre-2014 days by your total days. The order a tax adviser or the tax-office software follows is:

1. Find the real gain. Take the sale price, subtract the CPI-indexed purchase price and CPI-indexed deductible costs. What is left, above inflation, is the real gain. Keep your receipts: see tax documents and receipts.
2. Count total days owned. From the purchase date to the sale date.
3. Count pre-2014 days. From the purchase date to 31 December 2013.
4. Count post-2014 days. From 1 January 2014 to the sale date.
5. Apportion. Exempt share is pre-2014 days divided by total days. Taxed share is post-2014 days divided by total days.
6. Tax the post-2014 slice at 25%. Multiply the real gain by the taxed share, then by 25%.

What is the pre-2014 share worth in a real example?

The earlier you bought, the more it is worth. The figures below are our own worked illustration of the method, not your numbers and not tax advice. We assume a real gain of NIS 1,000,000, a 25% rate and a sale on 1 January 2026, and compare a seller who bought in 2004 with one who bought in 2010.

We used whole years for clarity. The tax office counts actual days, so your true split will differ slightly. We also assumed the real gain is already worked out; that figure depends heavily on indexed costs and deductions.

Does a long holding period before 2014 matter that much?

Yes, and the effect grows the further back you bought. A 1995 purchase has 19 pre-2014 years to count; a 2012 purchase has only 2. Two neighbors selling identical apartments on the same day for the same gain can owe very different tax because one held longer before 2014. That is why you should confirm your exact acquisition date from the original purchase contract before you model anything.

Linear also interacts with the single-apartment exemption. An Israeli resident selling their only home below the NIS 5,008,000 ceiling may be fully exempt and never need the linear math. A seller who does not qualify for that exemption falls back on linear to shield the pre-2014 part.

What happens if you inherited a long-held property?

You count the deceased’s purchase date, not the date of death. When you inherit Israeli property you step into the deceased’s tax position: their cost basis and their acquisition date carry over. Israel has no inheritance or estate tax, so the gain is simply deferred to your eventual sale.

That usually means a larger taxable gain, because the basis is the old, low purchase price, but also a longer pre-2014 exempt period if the deceased bought long ago. If a parent bought in 1990, an heir who sells in 2026 still counts all those pre-2014 years. A separate full-exemption route exists under section 49b(5) for a qualifying heir of a sole-apartment owner. The two interact in fact-specific ways, so read our page on selling inherited property and get advice.

Can a foreign seller use the linear method?

Yes, and for many foreign sellers it is the main relief left. Foreign-resident sellers generally cannot use the Israeli single-apartment exemption. Since Amendment 76, a non-resident qualifies only by proving, with confirmation from their home country, that they own no other residential apartment there, which is hard to obtain in practice.

A non-resident who bought before 2014 can still treat the pre-2014 portion of the gain as exempt and pay 25% only on the post-2014 portion. The 2014 to 2017 cap that limited a family to two linear sales was lifted on 1 January 2018, so that restriction no longer bites. If you sell from abroad, also review selling as a foreign resident and the taxes and costs sub-hub for the rest of the process. Wherever you live, the buyer pays an advance on your mas shevach to the Tax Authority out of the price, 15% if you bought before 7 November 2001 and 7.5% if you bought on or after that date, and it is credited against your tax, with any excess refunded (section 15 of the Real Estate Taxation Law).

Will the pre-2014 exemption stay in place?

Not necessarily, so do not treat the 0% slice as permanent. A draft bill has proposed cancelling or phasing out the preferential linear benefit. The versions reported include raising the rate on the pre-2014 portion from 0% gradually toward 25%, roughly 5 percentage points a year up to about 2030, or a hard cut-off where the benefit ends after 31 December 2030. As of mid-2026 this is a proposal, not enacted law, and the exact mechanism is unsettled.

In plain terms, the tax-free slice in the example above may shrink or disappear for sales completed after a future date. If most of a large gain sits in the pre-2014 slice, the timing of your sale could matter a great deal. Watch the Knesset Arrangements Law and Israel Tax Authority publications, or have your adviser do it.

What should you check before relying on the linear method?

• Confirm your exact purchase date from the original purchase agreement; the day count drives the split.
• Gather indexed cost receipts (purchase tax, agent, legal, improvements, betterment levy) so the real gain is right.
• Check whether a full exemption applies first (single-apartment or inheritance route); linear is the fallback, not always the answer.
• If inherited, confirm the deceased’s acquisition date and whether section 49b(5) applies.
• Plan for the buyer’s advance on your mas shevach in a taxable sale, whether or not you live in Israel, and for the tax clearance needed before title can transfer.
• Check the current law on the phase-out close to your sale date, not from an old article.
• Claim it on the declaration with Form 7914. The linear exemption for a qualifying apartment (דירת מגורים מזכה, dirat megurim mezaka) is claimed in the sale declaration on Form 7002, where you tick the section 48A(b2) box and attach Form 7914, the annex that shows the apartment meets the qualifying-apartment definition. You print Form 7914, fill it in by hand and send it with the declaration: online, at the service station in your nearest Real Estate Taxation office if you are allowed to file on paper, or by post to that office. The Tax Authority says it handles it in about 3 months (Form 7914 service). If unused building rights affect the price, Form 7158 also splits your assessment into a linear part and a regular part (Form 7158 service).
• File on time: the sale declaration is due within about 30 days of signing.

Frequently asked questions

Is the pre-2014 part of my gain really tax free?

Yes, under the linear calculation the share of the real gain that matches your days before 1 January 2014 is exempt, as the law stands now. Only the share from 1 January 2014 onward is taxed at 25%.

Do I count years or days?

Days. The tax office counts actual days from purchase to sale, so a table in whole years is only an estimate.

Does the date of an inheritance reset the clock?

No. An heir takes over the deceased’s purchase date, so a long-held home keeps its pre-2014 days.

Can I use it if I live abroad?

Yes. A non-resident who bought before 2014 can still exempt the pre-2014 portion, even without the single-apartment exemption.

Could the benefit disappear before I sell?

It could. A draft bill proposes phasing it out, but as of mid-2026 it is not law. Check the live statute close to your sale date.

Want us to connect you with a tax adviser who handles linear mas shevach and pre-2014 sales? Tell us about your sale and we will point you in the right direction.

Related pages

• Mas shevach (capital gains tax) when selling in Israel
• Single-apartment tax exemption
• Taxes and costs when selling
• How to sell an apartment, step by step
• Selling property in Israel

This is general information, not legal or tax advice; confirm with a licensed professional.