On a normal single-home sale you keep roughly 70% of the price as cash in hand, once the deductions are done. The price is never what lands in your account. Off the top come the mortgage payoff, mas shevach (25% on the real gain, but often zero if you qualify for the single-apartment exemption up to the NIS 5,008,000 ceiling), any betterment levy (50% of a planning-driven value rise, usually zero on an ordinary resale), agent commission (about 2% plus 18% VAT, so about 2.36% effective), your lawyer (about 0.5% to 1.5% plus 18% VAT), and a few hundred shekels of clearances and Tabu fees.
Put real numbers on it: a clean NIS 3,000,000 sale with NIS 800,000 still owed, where the seller keeps the single-apartment exemption, nets about NIS 2,110,000. Strip out the mortgage and your actual selling costs (agent plus lawyer plus clearances) run near NIS 90,000, about 3% of the price, with the agent at 2.36% being by far the biggest line you can negotiate. The one thing that can blow up the figure is losing the mas shevach exemption: 25% on a NIS 1,000,000 real gain is NIS 250,000, which dwarfs every other cost combined.
The full waterfall on a NIS 3,000,000 sale
Here is one complete worked example, top to bottom, for a resident selling their only apartment at NIS 3,000,000 with NIS 800,000 still owed on a prime-track mortgage and no planning-driven betterment. Read it as a stack: each row takes money off the line above it.
| Line | Amount (NIS) | Running total (NIS) |
|---|---|---|
| Sale price | 3,000,000 | 3,000,000 |
| Less mortgage payoff (balance) | -800,000 | 2,200,000 |
| Less mas shevach (single-apartment exemption applies) | 0 | 2,200,000 |
| Less betterment levy (no new plan added value) | 0 | 2,200,000 |
| Less agent commission (2% plus 18% VAT) | -70,800 | 2,129,200 |
| Less seller lawyer (0.5% plus 18% VAT) | -17,700 | 2,111,500 |
| Less clearances and Tabu fees | -1,500 | 2,110,000 |
| Net cash in hand | 2,110,000 | 2,110,000 |
My worked estimate: on this NIS 3,000,000 sale the total of all selling costs (agent, lawyer, clearances) is about NIS 90,000, which is 3.0% of the price. The two professional fees alone (agent plus lawyer) come to NIS 88,500, or 2.95%. Basis: 2% agent plus 0.5% lawyer, both grossed up by 18% VAT, plus NIS 1,500 in clearances and registry fees. Your single largest controllable cost is the agent: at 2.36% effective it is roughly five times your lawyer at a 0.5% rate.
Reading each line: what it is and who decides it
Mortgage payoff: the balance, not your old loan amount
Subtract what you still owe today, not what you borrowed. The bank issues a payoff letter (yitrat hilva) with the exact figure, and the lien is removed once it is paid so the buyer can register clean title. On a prime or variable track there is no early-repayment penalty; a penalty is large only on a fixed loan when market rates have fallen below your original rate. Run your own balance and penalty check on the dedicated page: paying off a mortgage when selling in Israel.
Mas shevach: 25% on the real gain, often zero
Mas shevach is the national capital gains tax, 25% on the real (inflation-adjusted) gain, and the inflationary part of the gain is never taxed. Many sellers pay zero because the single-apartment exemption covers a sale at or below the NIS 5,008,000 ceiling (frozen 2025 to 2027) when you are a resident, it is your only apartment, and you have owned it about 18 months. That is why the waterfall above shows 0 on this line. If you do not qualify, this line can be your biggest deduction by far. The full math, the linear 2014 split, and inherited or non-resident cases live on capital gains tax when selling in Israel.
Betterment levy: 50% of a planning uplift, often zero
Heitel hashbacha is a municipal levy, 50% of the rise in value caused by an approved planning action (rezoning, a new plan, or added building rights). Most ordinary resale apartments owe nothing here because no new plan added value during your ownership. When it does apply it can be very large: a plot that rose NIS 2,000,000 in value carries a NIS 1,000,000 levy. The seller pays it, and it must be cleared to register the transfer. See the betterment levy for Israeli sellers to check whether your property is exposed.
Agent commission: the largest cost you can negotiate
The customary residential commission is about 2% of the sale price plus 18% VAT, so the effective cost is about 2.36%, and each side pays its own agent. It is negotiable and some deals run about 1.5%. On the NIS 3,000,000 sale, 2% plus VAT is NIS 70,800; dropping to 1.5% plus VAT would be NIS 53,100, a NIS 17,700 saving. Details and exclusivity rules are on standard real estate agent fees in Israel.
Lawyer, clearances, and Tabu fees: small but mandatory
Your lawyer typically charges about 0.5% to 1.5% plus 18% VAT to draft and close the deal. Clearances are cheap by comparison: the Tabu (Land Registry) fee is on the order of NIS 75 to 150 per action, and you need a municipal clearance (ishur iriya) confirming arnona and any betterment are paid plus a Tax Authority clearance for mas shevach. Without both clearances, the registry will not record the buyer. You must also report the sale to the Tax Authority within 30 days of signing.
How a missed exemption changes the number
The single biggest swing in your net is whether mas shevach applies. To show it, take the same NIS 3,000,000 sale but assume a NIS 1,000,000 real taxable gain that does not qualify for the exemption.
| Scenario | Mas shevach | Net cash in hand (NIS) |
|---|---|---|
| Exemption kept (waterfall above) | 0 | 2,110,000 |
| No exemption, 25% on NIS 1,000,000 real gain | -250,000 | 1,860,000 |
My worked estimate: losing the exemption on a NIS 1,000,000 real gain costs NIS 250,000, which is 8.3% of the sale price and about 11.8% of the net you would otherwise keep. Basis: 25% of NIS 1,000,000, compared against the NIS 2,110,000 exempt-case net. That one eligibility test is worth more than every other selling cost combined, which is why timing your sale to keep the exemption matters more than haggling the agent.
Try the numbers with your own figures
The selling hub carries an on-page net-proceeds calculator where you can drop in your real sale price, mortgage balance, gain, and fee rates and watch the waterfall update. Use it to stress-test the two big unknowns: your exact mortgage payoff (ask your bank for the balance letter) and whether you keep the mas shevach exemption.
Confirm before you act
- Mortgage balance: get the bank payoff letter and ask whether any early-repayment fee applies to your track.
- Exemption status: confirm with your lawyer or tax advisor that you meet the resident, sole-apartment, and roughly 18-month conditions, and that you have not used the exemption in the last 18 months.
- Betterment exposure: ask the local committee whether any plan has raised your property’s value; do not assume zero.
- Fee quotes in writing: get the agent and lawyer percentages, and confirm VAT is 18% on top.
- Clearances and deadline: line up the municipal and tax clearances early, and file the sale declaration within 30 days of signing.
Quick answers for net-proceeds questions
Is the sale price taxed before I see it?
No. There is no percentage transfer tax on the seller. What reduces your net is mas shevach on the real gain (often zero with the exemption), any betterment levy, and your own fees.
Does the buyer ever hold back part of my money?
Yes, when a foreign seller is involved. The buyer commonly withholds about 7.5% to 15% and remits it to the Tax Authority, released once your tax clearance is issued. Resident single-apartment sellers usually avoid this.
What is the rough total of selling costs as a percentage?
For a clean exempt sale, plan on about 3% of the price in agent, lawyer, and clearance costs combined, before any mortgage payoff. Mas shevach or betterment, if they apply, sit on top of that.
Why is my net lower than a simple price-minus-mortgage figure?
Because the price-minus-mortgage figure ignores fees and taxes. The waterfall above is the honest version: it stacks every deduction in the order they hit.
Sources you can check
- PwC Israel, individual other taxes (mas shevach): https://taxsummaries.pwc.com/israel/individual/other-taxes
- Nadlan Center, capital gains and exemptions: https://www.nadlancenter.co.il/article/413
- Trustton, betterment levy explained: https://trustton.com/en/betterment-levy-what-is-it-how-is-it-calculated-and-what-are-the-implications-for-property-owners/
- Sands of Wealth, Israel property taxes and fees: https://sandsofwealth.com/blogs/news/israel-property-taxes-fees
- First Israel, mortgage prepayment penalties: https://www.firstisrael.com/blog/understanding-mortgage-prepayment-penalties-in-israel/
Ready to see your real number? Send us your sale price and mortgage balance and we will build your net-proceeds waterfall.
This number is the point of the whole exercise. Walk the full sale that produces it in selling property in Israel.
