A sale may qualify for the sole-dwelling Mas Shevach exemption if all statutory conditions are met. These include a qualifying dwelling, sale of the seller’s entire interest, the sole-home and family-unit tests, at least 18 months of ownership while the property is a dwelling, and no other sale using this exemption in the preceding 18 months. A qualifying foreign resident must also provide the required evidence of no dwelling in the country of residence. The exemption ceiling is NIS 5,008,000. The full guide to the tax itself, with the calculation of the real gain, is on our capital gains tax page; this page answers one question: when does the sale pay nothing, and what changes when it does not.
The section 49A(a1) exemption ceiling is fixed for 2025-01-01 through 2027-12-31, as stated in Tax Authority instruction 1/2026, section 2(d). Go over it and you are not shut out. Where the exemption otherwise applies, the amount above the ceiling determines the proportional taxable part under section 49A(a1). Additional building rights can require a separate calculation. The tax treatment depends on the applicable gain calculation and other rules.
Who qualifies for the single-apartment exemption (דירה יחידה)?
Use these as screening questions; the full statutory conditions, family-unit rules and exceptions must also be reviewed.
Key conditions and the price ceiling
- You are an Israeli tax resident, or an eligible foreign resident who provides the prescribed evidence of no dwelling in the country of residence.
- The dwelling satisfies the sole-home test in Israel and the Area, with the applicable family-unit rules and disregarded-interest exceptions.
- You have owned the dwelling for at least 18 months after it became a residential dwelling; a later acquisition date does not give credit for a period before you owned it.
- You have not claimed a single-apartment exemption in the last 18 months (the once-per-period rule).
- Compare the sale price with NIS 5,008,000. At or below the ceiling, there is no above-ceiling portion. If the other conditions are met, an above-ceiling sale can still receive proportional relief.
When the exemption may be unavailable or partial
- A second dwelling can affect the test, but specified interests are disregarded; for example, a share not exceeding one-third, or an inherited share not exceeding one-half, subject to the full rules. Check all relevant rights records and family holdings.
- The required 18-month period has not elapsed; for a new dwelling the period cannot begin before it became a dwelling.
- You already used this exemption inside the last 18 months on a different sale. You must wait out the period.
- You are a foreign resident who cannot meet the prescribed evidence requirement and the other exemption conditions. Foreign residence alone does not rule out the exemption. See selling property in Israel as a non-resident.
- Your sale price is above NIS 5,008,000. This does not disqualify an otherwise eligible sale. The above-ceiling portion enters the taxable gain calculation, as shown below.
What is the NIS 5,008,000 ceiling, and what happens one shekel over it?
The ceiling (tikrat petor) is the value cap on the exemption, NIS 5,008,000 for 2025-01-01 through 2027-12-31, and a sale at or below it can be fully exempt. Where the other exemption conditions are met, a sale above the ceiling retains proportional relief. Allocate the acquisition value and expenses to the taxable portion and apply the relevant gain and rate rules. This is sometimes called the luxury cap because it only bites on higher-value homes. Where unused building rights affect the sale price, a separate calculation may be needed.
How the ceiling and building rights are calculated
For the ceiling-only example below, 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. Additional building rights can change the calculation.
When unused building rights affect the sale price. For an eligible sale, section 49Z can require a separate calculation of the dwelling’s value without the additional rights and the value attributable to those rights. The dwelling portion can qualify for an exemption, and part of the rights may receive further relief, subject to separate conditions and limits. As an official appraisers’ exam example and its solution illustrate, a dwelling valued above the section 49Z limit for additional relief on building rights may still qualify for exemption, subject to the separate section 49A(a1) ceiling and the other conditions. The remainder may enter the taxable-gain calculation. Ask a tax professional to assess the valuation and relief together with the section 49A(a1) ceiling. The Tax Authority explains the section 49Z calculation and its separate limits.
Worked partial-exemption example using the 2025–2027 ceiling
Say you sell your only apartment for NIS 6,260,000, which you bought years ago for NIS 3,000,000. Assume all other exemption conditions are met, the price is not affected by unused building rights and a 25% rate applies to the taxable portion. We ignore indexation, costs, depreciation, other relief and surtax to illustrate the allocation; this is not an assessment of an actual sale.
- 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 the assumed 25% rate: 0.25 × 652,000 = NIS 163,000, before other applicable adjustments.
In this example, the home selling for NIS 1,252,000 over the ceiling is not taxed on the whole gain. It is taxed on one fifth of it. Roughly NIS 0.52 of taxable gain appears per shekel over the ceiling, costing about NIS 0.13 of tax per shekel at the 25% rate. Your own ratio depends on your purchase price against your sale price. The actual result can change with the verified basis, indexing, depreciation, deductions and other tax rules.
Why do the 18-month tests trip people up?
Because there are two separate 18-month rules and people confuse them. Holding: you need at least 18 months of ownership after the property became a residential dwelling. 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.
Which other mas shevach routes should you compare?
Another calculation may be available for an eligible qualifying residential dwelling acquired before 2014: preferential time apportionment of the real gain around 1 January 2014. Its eligibility conditions must be checked separately. If you bought long before 2014, run both routes and compare, because a long pre-2014 holding can make the linear route competitive. The day-based mechanics have their own page on the linear mas shevach calculation, and the general calculation sits on the capital gains tax page.
| Question | Single-apartment exemption | Linear calculation (Amendment 76) |
|---|---|---|
| Who it is for | Eligible sellers satisfying the sole-home and residency-evidence rules | Eligible qualifying-dwelling sellers; non-residents and multi-home owners may qualify |
| Best outcome | Possible zero tax up to NIS 5,008,000, subject to the applicable rules | Qualifying pre-2014 gain exempt, post-2014 gain at 25%; building rights may be calculated separately |
| Frequency limit | Once per 18 months | No per-period cap since 2018 |
| Above the ceiling | Proportional taxable part follows the applicable gain and rate rules | Time-based calculation, subject to qualifying-dwelling and other statutory conditions |
What should you confirm before you claim the exemption?
Before relying on a zero bill, check the sole-home and family-ownership tests, both 18-month rules, the current ceiling and the filing requirements. Building rights that affect the sale price can also change the calculation.
Documents and filing checks
- 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.
The Tax Authority describes form 7000 for the sale of a qualifying residential dwelling that does not include existing or expected building rights, when a full Mas Shevach exemption is requested. Other cases use other declaration routes. Ask your lawyer which filing applies to your sale.
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 clearest next step: confirm your “only apartment” status in the Tabu today.
Words worth knowing
- Mas Shevach: land appreciation tax calculated under the applicable acquisition-period, basis, rate and relief rules.
- 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 2025-01-01 through 2027-12-31.
- Real gain: the statutory gain after the inflation calculation. Historical taxable inflationary amounts can also matter.
- Residency evidence: Israeli tax residency or the prescribed foreign-resident evidence is one of several exemption conditions.
Frequently asked questions
Is the exemption really zero tax?
A sale at or below NIS 5,008,000 can be fully exempt if it meets the applicable conditions. If additional building rights affect the sale price, the calculation may be different. You still file and obtain clearance.
I just bought 14 months ago. Can I sell exempt?
A purchase only 14 months ago does not meet the standard 18-month sole-dwelling holding condition. Other relief depends on its own rules; preferential pre-2014 treatment is not a general option for a recently acquired dwelling.
My home is worth NIS 7,000,000. Am I shut out?
A sale above the ceiling may retain proportional relief if the other exemption conditions are met. Tax on the remaining part follows the applicable gain and rate rules; the worked example assumes 25%.
Does owning a tiny share of a parents’ flat count?
The size and origin of the share matter. A share not exceeding one-third, or an inherited share not exceeding one-half, may be disregarded under the statutory rules. Verify the full ownership and family facts.
Can a non-resident use the exemption?
Yes, a foreign resident can qualify if they provide the prescribed evidence of no dwelling in the country of residence and satisfy the other exemption conditions.
Sources you can check yourself
- Israel Tax Authority instruction 1/2026, section 2(d): the section 49A(a1) exemption ceiling and its stated period.
- PwC’s independent overview of Israeli taxes: 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/
Related pages
- Mas shevach (capital gains tax) when selling in Israel
- The linear mas shevach calculation for pre-2014 holdings
- Taxes when selling property in Israel
- How to sell an apartment in Israel
- Selling property in Israel
This is general information, not legal or tax advice; confirm with a licensed professional.
