NIS 5,008,000 is the line that buys you a tax bill of zero. Sell your only home in Israel at or below that price, clear the tests, and the land appreciation tax (mas shevach) on the sale is nothing. That ceiling is frozen for tax years 2025 to 2027.
The tests are simple to state and easy to miss. You need to be an Israeli resident, this has to be your only residential apartment, you should have owned it for roughly 18 months, and you cannot have claimed this same exemption in the prior 18 months. Tick all four and a qualifying sale up to the ceiling pays zero.
Go one shekel over NIS 5,008,000 and you are not shut out. Only the slice of the gain that sits above the ceiling gets taxed, generally at 25% on the real gain, while everything under the ceiling stays exempt. The whole job here is figuring out which side of those lines your sale lands on.
First, run the qualify-or-disqualify checklist
Go through both lists before you do anything else. You need every line in the first list to be true, and every line in the second list to be false.
You qualify if all of these are true
- You are an Israeli resident for tax purposes at the time of sale.
- This is your only residential apartment in Israel (the “sole apartment” test).
- You have owned it for about 18 months, counted from purchase or, for a new-build, from completion.
- You have not claimed a single-apartment exemption in the last 18 months (the once-per-period rule).
- The sale price is at or below NIS 5,008,000, so no part of the gain falls into the taxed band.
You are disqualified, or only partly exempt, if any of these are true
- You own a second apartment, even a small share of one, so the home is not your “only” one. A minor fractional interest can break the test, so check the Tabu, not just your memory.
- You bought it less than 18 months ago. The clock has not run yet.
- You already used this exemption inside the last 18 months on a different sale. You must wait out the period.
- You are a non-resident. Foreign-resident sellers generally cannot use this exemption and must lean on the linear calculation instead. See the rules on the capital gains tax page.
- Your sale price is above NIS 5,008,000. You are not disqualified, but the part above the ceiling is taxed. The math for that is below.
If every line in the first list is true and nothing in the second list applies, stop reading the worried parts: you are looking at a zero tax bill on this sale.
The NIS 5,008,000 ceiling, and what happens one shekel over it
The exemption is not unlimited. It is capped by a value ceiling (tikrat petor) of NIS 5,008,000, frozen for tax years 2025 to 2027. A sale at or below that line can be fully exempt. Above it, the exemption does not vanish. Instead the gain is split in proportion to the sale price: the slice that sits under the ceiling stays exempt, and only the slice above the ceiling is taxed, generally at 25% on the real (inflation-adjusted) gain. This is sometimes called the luxury cap because it only bites on higher-value homes.
The key idea: the ceiling caps the exempt portion of the price, and the taxable gain is the same fraction of your total gain as the over-ceiling price is of your total price.
A worked partial-exemption example (our own estimate, basis shown)
Say you sell your only apartment for NIS 6,260,000, which you bought years ago for NIS 3,000,000. We will keep it simple and ignore indexation and deductible costs so you can see the mechanism. This is our own worked estimate to show the method, not tax advice on your numbers.
- Total nominal gain: 6,260,000 minus 3,000,000 = NIS 3,260,000.
- Exempt share of the price: 5,008,000 divided by 6,260,000 = 0.80, so 80% of the gain is exempt.
- Exempt gain: 80% of 3,260,000 = NIS 2,608,000.
- Taxable gain: the remaining 20% = NIS 652,000.
- Tax at 25%: 0.25 times 652,000 = NIS 163,000 (before indexation relief, which would lower it).
So a home selling for exactly NIS 1,252,000 over the ceiling does not get taxed on the whole gain. It gets taxed on one fifth of it. Real indexation (the inflationary component is never taxed) and your deductible costs would push the actual bill below NIS 163,000.
Per-shekel-over view (our estimate): in this example every extra shekel of price above the ceiling drags a bit of gain into the taxed band. The taxable gain of NIS 652,000 came from being NIS 1,252,000 over the ceiling, so roughly NIS 0.52 of taxable gain appeared per shekel over, costing about NIS 0.13 of tax per shekel over at the 25% rate. The exact ratio depends entirely on your own purchase price versus sale price.
Why the 18-month tests trip people up
There are two separate 18-month rules and people confuse them. Holding: you must have owned the apartment for about 18 months before the sale qualifies. Frequency: you can only use the single-apartment exemption once every 18 months. Selling two homes in the same year, or selling barely a year after you bought, can knock out the exemption on the second or the early sale even when everything else looks clean.
One more trap: the “only apartment” test is about what you own on the sale date. If you bought your next home before selling this one, you may briefly own two, which can break the test unless you fit a specific overlap allowance. Time the order of your transactions with a lawyer.
Words worth knowing
- Mas shevach: Israel’s land appreciation tax, 25% on the real gain when you sell residential property.
- Petor dira yechida: the single-apartment exemption, the relief this page is about.
- Tikrat petor: the value ceiling on the exemption, NIS 5,008,000 for 2025 to 2027.
- Real gain: your gain after stripping out inflation; only this part is taxed, never the inflationary part.
- Israeli resident: resident for tax purposes, which is what unlocks this exemption.
Single home versus the linear route, at a glance
| Question | Single-apartment exemption | Linear calculation (Amendment 76) |
|---|---|---|
| Who it is for | Israeli residents with one home | Anyone, including non-residents and multi-home owners |
| Best outcome | Zero tax up to NIS 5,008,000 | Pre-2014 gain exempt, post-2014 gain at 25% |
| Frequency limit | Once per 18 months | No per-period cap since 2018 |
| Above the ceiling | Over-ceiling slice taxed at 25% | No ceiling, split is by date not price |
If you bought long before 2014, run both routes and compare. A long pre-2014 holding can make the linear calculation competitive. The mechanics live on the capital gains tax page.
Confirm before you act
- Check the Tabu for any second property interest, including a share inherited with siblings, before you assume “only home” applies. Inherited shares have their own rules covered on selling inherited property.
- Count both 18-month clocks against the planned signing date, not today.
- Confirm the NIS 5,008,000 ceiling is current for your sale year with your lawyer or the Israel Tax Authority, since frozen figures can change.
- Remember the 30-day filing. You must report the sale to the Tax Authority within 30 days of signing, and you need a tax clearance to register the transfer, even when the bill is zero.
Quick answers
Is the exemption really zero tax?
Yes, on a qualifying sale up to NIS 5,008,000 the mas shevach is zero. You still file and still obtain clearance.
I just bought 14 months ago. Can I sell exempt?
Not yet under the single-apartment route. The holding test is about 18 months. You may still have the linear calculation as an option.
My home is worth NIS 7,000,000. Am I shut out?
No. You keep the exemption on the slice up to the ceiling and pay 25% only on the proportional gain above it, as shown in the worked example.
Does owning a tiny share of a parents’ flat count?
It can break the “only apartment” test. Verify the exact share and its effect before relying on the exemption.
Sources you can check yourself
- Israel Tax Authority overview of capital gains: https://taxsummaries.pwc.com/israel/individual/other-taxes
- Single-apartment exemption and ceiling explainer: https://www.nadlancenter.co.il/article/413
- Luxury cap mechanics above the ceiling: https://barlaw.co.il/practice_areas/real-estate/real-estate-taxation/client_updates/luxury-apartments-in-israel-what-is-the-maximum-exemption-from-land-appreciation-tax/
Selling your only home and want a clean read on whether you clear every test before you list? Ask us to check your single-apartment exemption and we will flag any 18-month or ceiling issue before it costs you. The single clearest next step: confirm your “only apartment” status in the Tabu today.
The exemption can erase your tax bill entirely. See what is left to handle in selling property in Israel.
