Purchase tax (Mas Rechisha) is a one-time, progressive tax the buyer pays the Israel Tax Authority on every property purchase in Israel. What you pay depends on your buyer status. For a qualifying single residential home (Israeli resident, first or only home) the brackets are 0% up to ₪1,978,745; 3.5% to ₪2,347,040; 5% to ₪6,055,070; 8% to ₪20,183,565; and 10% above. Investors, owners of an additional home and most non-resident buyers pay the additional-home schedule, 8% up to ₪6,055,070 and 10% above, from the first shekel. New immigrants (olim) get a reduced track: 0% / 0.5% / 8% / 10%. These brackets are frozen from 16 January 2025 to 15 January 2028 (no annual CPI update during the freeze). The tax is due within 60 days of signing, after your lawyer files the purchase declaration. Always run the official Tax Authority simulator before you sign.
This is the deepest tax page in our buying guide. It is part of the buying hub and sits under the wider picture in our total cost of buying in Israel guide. Here you get stand-alone bracket tables by buyer status, a worked slice-by-slice calculation, the payment and declaration deadlines, the bracket freeze explained, and how timing your purchase around aliyah changes your bill.
Purchase tax by buyer status
The single most important question is which buyer status you fall into, because that decides your whole schedule. Read the block that matches you. Each table stands on its own. The tax is progressive: you pay each rate only on the slice of value that lands in that bracket, not on the whole price.
Israeli resident, first or only home
This is the lowest schedule and the only one with a 0% starting band. It applies if you are an Israeli resident and the home is your first home, your only home, or you are upgrading and sell your old home inside the replacement-home window (24 months for purchases from 1 June 2025; the old 18-month window applies only to purchases made before that date).
| Portion of property value (₪) | Tax rate |
|---|---|
| Up to 1,978,745 | 0% (exempt) |
| 1,978,745 to 2,347,040 | 3.5% |
| 2,347,040 to 6,055,070 | 5% |
| 6,055,070 to 20,183,565 | 8% |
| Above 20,183,565 | 10% |
Existing owner or additional property (investor)
This schedule applies to Israeli residents buying a second home while keeping the first, and to anyone buying an investment property. There is no 0% band. You pay from the very first shekel.
| Portion of property value (₪) | Tax rate |
|---|---|
| Up to 6,055,070 | 8% |
| Above 6,055,070 | 10% |
This higher investor schedule has been extended through 31 December 2026. Confirm it is still current at the moment you sign, because the order is set by temporary legislation.
Non-resident or foreign buyer
By default a non-resident buyer pays the same additional-home schedule above: 8% up to ₪6,055,070 and 10% above, from the first shekel. There is no automatic 0% / 3.5% sole-home track for a foreign resident. The only way a non-resident reaches the cheaper resident schedule is by qualifying with no home anywhere in the world and meeting the Tax Authority’s “single home” conditions, which is narrow and must be checked case by case with your lawyer.
| Portion of property value (₪) | Tax rate |
|---|---|
| Up to 6,055,070 | 8% |
| Above 6,055,070 | 10% |
This is the line most foreign buyers under-budget. See the full file you will need in our guide to the documents foreign buyers need.
New immigrant (oleh) reduced track
An oleh (new immigrant) gets a special reduced schedule with a 0.5% middle band instead of 5%.
| Portion of property value (₪) | Tax rate |
|---|---|
| Up to 1,978,745 | 0% |
| 1,978,745 to 6,055,070 | 0.5% |
| 6,055,070 to 20,183,565 | 8% |
| Above 20,183,565 | 10% |
The rules that decide whether you actually get this track:
- Window: usable from 1 year before aliyah to 7 years after (years of national or military service are not counted in the 7 years).
- How often: once, for a home you live in.
- Sole-residence condition: for anyone who made aliyah after 15 August 2024, the property must be your sole residence to use the benefit. The older “can also be used for investment” reading no longer applies to post-15-August-2024 olim.
- Cap: if the property value is above about ₪20.18 million, the oleh benefit does not apply at all and you pay standard rates.
Planning the move around the purchase changes your bill. See buying after aliyah as an oleh for how to line the dates up.
Commercial property and land
The progressive residential brackets do not apply to an office, a shop, or a plot of land. Commercial property and land are taxed at a flat 6% of the whole value. Commercial and land deals are also generally subject to VAT (18%), unlike a second-hand home sold between private individuals.
Payment deadline and the purchase declaration
Two clocks start the day you sign the purchase contract. Miss either and you risk interest and penalties.
- Declaration (hatzharat rechisha): a real estate transaction self-declaration must be filed with the Tax Authority within 30 days of signing. Your lawyer files it and states which buyer status you are claiming.
- Payment: the purchase tax itself is due within 60 days of signing the agreement, on self-assessment.
Late filing or late payment adds interest and indexation, and in some cases penalties, so this is a deadline to diarise on contract day, not after handover.
How purchase tax is calculated, worked on ₪3,000,000
Because the tax is progressive, the easiest way to see your real bill is to slice the price and apply each rate to its own slice. Here is the same ₪3,000,000 home priced three ways, side by side.
Worked example (Semerenko estimate, frozen 2026 brackets, math shown):
| Slice of the ₪3,000,000 price | Resident, single home | Investor / non-resident | Oleh |
|---|---|---|---|
| 0 to 1,978,745 | 0% = ₪0 | 8% = ₪158,300 | 0% = ₪0 |
| 1,978,745 to 2,347,040 (₪368,295) | 3.5% = ₪12,890 | (part of 8% band) | 0.5% = ₪1,841 |
| 2,347,040 to 3,000,000 (₪652,960) | 5% = ₪32,648 | (part of 8% band) | 0.5% = ₪3,265 |
| Total purchase tax | about ₪45,538 | about ₪240,000 | about ₪5,106 |
Basis: 8% applies to the whole ₪3,000,000 for the investor and non-resident (8% x 3,000,000 = ₪240,000). For the resident, only the slices above ₪1,978,745 are taxed. For the oleh, the slice from ₪1,978,745 to ₪3,000,000 (₪1,021,255) is taxed at 0.5% = ₪5,106. The same ₪3,000,000 home costs a resident about ₪45,538, an oleh about ₪5,106, and an investor or foreign buyer about ₪240,000. The buyer-status choice is worth nearly ₪235,000 on this one deal. These are illustrative figures, not advice; confirm with the official simulator.
Coordinating purchase tax with your lawyer
Your conveyancing lawyer, not the agent, runs the tax side of the deal. The lawyer confirms which buyer status you qualify for, files the self-declaration inside the 30-day window, calculates and arranges payment inside the 60-day window, manages the replacement-home timing if you are upgrading, and flags any exemption or relief you are entitled to. Getting the classification right before you sign is the single biggest lever on your bill, as the worked example shows. The same lawyer who files your tax should be the one checking title and contract; see how the roles fit together in signing a property contract in Israel.
Timing, buying before versus after aliyah
If you plan to make aliyah, when you buy decides which schedule you get, and the gap is large. Buy as a non-resident before you have immigrant status and you are on the 8% / 10% additional-home schedule. Buy inside the oleh window (from 1 year before aliyah to 7 years after) and meet the sole-residence condition, and you drop to the 0.5% middle band, which on our ₪3,000,000 example is a difference of roughly ₪235,000.
- If a move is realistic within the year, getting your immigrant paperwork in order before you sign can move you onto the oleh track.
- If you already made aliyah after 15 August 2024, the home must be your sole residence to use the benefit.
- If you upgrade later, the replacement-home window is 24 months for purchases from 1 June 2025 to keep the single-home rate.
Plan the sequence in our guides to buying after aliyah and the wider guide to getting a mortgage in Israel, since lender treatment also changes with status.
The 2025 to 2028 bracket freeze, what it means for your bill
In a normal year the brackets rise with the Home Price Index, which quietly cuts your tax as prices and inflation climb. That is not happening now. A Temporary Order (Horaat Shaa) froze the brackets from 16 January 2025 to 15 January 2028. During the freeze the bands do not move with CPI. So as prices drift up, more of your price falls into higher bands than it otherwise would, which is effective bracket creep. The practical takeaway: the figures in the tables above are fixed through 15 January 2028, but the freeze means you may pay relatively more than under the old annual-indexation rule. Do not budget for the brackets rising in your favour before 2028.
VAT context for new-build buyers
Purchase tax is not the only tax line. Since 1 January 2025 VAT is 18% (up from 17%). New-build homes from a developer are usually quoted plus VAT, so the 18% is baked into your price and into ancillary services like lawyer and agent fees. Second-hand homes sold between private individuals carry no VAT. If you are weighing new versus resale, see new versus second-hand property in Israel.
Run a tax check before you sign
Confirm three things before contract day: (1) which buyer status you actually qualify for, (2) the exact brackets in force on your signing date, and (3) your real shekel figure from the official Israel Tax Authority purchase-tax simulator. Your lawyer should agree the number with you in writing before you commit, because the declaration you file states your status and is hard to unwind later.
Common questions about Israeli purchase tax
How much purchase tax does a first-home buyer pay?
An Israeli resident buying a first or only home pays 0% up to ₪1,978,745, then 3.5%, 5%, 8% and 10% on higher slices. On a ₪3,000,000 home that is about ₪45,538 (Semerenko estimate, math above).
What purchase tax does a non-resident pay in Israel?
By default the additional-home schedule, 8% up to ₪6,055,070 and 10% above, from the first shekel. There is no 0% band unless you qualify as owning no home anywhere, which is narrow.
What is the oleh purchase-tax discount?
A reduced track of 0% / 0.5% / 8% / 10%, usable from 1 year before to 7 years after aliyah, once, for a home you live in. Aliyah after 15 August 2024 requires it be your sole residence.
What does a second home or investor pay?
8% up to ₪6,055,070 and 10% above, from the first shekel, under the investor order extended through 31 December 2026.
Are the brackets going up each year?
No. They are frozen with no CPI update from 16 January 2025 to 15 January 2028.
When is the tax due?
The declaration is filed within 30 days of signing and the tax is paid within 60 days of signing.
How we verified these brackets
Every figure on this page is reconciled against the Israel Tax Authority schedule in force for the freeze period (checked June 2026), with cross-checks against Kol Zchut and Nefesh B’Nefesh for the oleh track. Confirm your own number on the official simulator before signing.
Reader-facing sources
- Israel Tax Authority (Rashut HaMisim), purchase-tax brackets and simulator (gov.il)
- Kol Zchut, purchase-tax calculation and oleh discount
- Nefesh B’Nefesh, planning your aliyah purchase tax
- PwC Israel, individual other taxes (VAT 18%, additional-home schedule)
Your one next step: have your purchase-tax position checked before you sign, so your buyer status and shekel figure are locked in writing. Have your purchase-tax position checked before you sign and the Semerenko Group team will walk you through it.
