Taxes When Buying an Apartment in Israel

Buying an apartment in Israel must be reported to the Israel Tax Authority and may give rise to purchase tax. The amount is not determined only by the price of the apartment. It may also depend on the type of property, the buyer’s residency and family status, other residential rights owned by the buyer and the law in force on the transaction date.

Tax planning should form part of the legal review before signature. Read more about buying an apartment in Israel and the checks that should be completed before transferring funds.

What is purchase tax

Purchase tax is imposed on the acquisition of a right in Israeli real estate. Residential property is generally taxed under progressive brackets, while different rules may apply to land, commercial property and other real-estate rights. The brackets and monetary thresholds are updated periodically, so figures quoted in older articles should not be relied upon.

For an initial estimate, use the Israel Tax Authority’s official purchase-tax calculator. The result should be checked against the buyer’s actual legal and tax status.

A sole apartment or an additional apartment

A central question is whether the purchase qualifies as the acquisition of the buyer’s sole residential apartment under Israeli law. The answer may be affected by partial interests, inherited property, rights owned by a spouse or minor children, an existing apartment intended for sale and previous contractual commitments.

A buyer who acquires a replacement apartment before selling an existing home may, subject to the statutory conditions and time limits, be treated as a replacement-home buyer. If the earlier apartment is not sold within the applicable period, additional tax, linkage and interest may become payable.

Where two transactions are being coordinated, the payment and tax timetable should also take account of selling an apartment in Israel.

Foreign residents and special reliefs

Foreign residency may affect entitlement to the reduced purchase-tax brackets associated with a sole apartment. Citizenship alone does not necessarily determine the result. The buyer’s residency status, the conditions prescribed by law and the available documents must be examined before filing the declaration.

New immigrants and certain eligible persons, including some persons with disabilities and victims of hostile acts, may qualify for relief subject to statutory conditions. A relief should not be claimed automatically. It is important to compare it with the ordinary calculation and consider any limitation on the number or purpose of claims.

Reporting within 30 days

Both buyer and seller must report the transaction to the Israel Tax Authority within 30 days. The buyer’s declaration includes the parties, the property, the consideration, the purchase-tax calculation and any application for relief. Where the buyer is represented, the declaration is generally submitted electronically by the lawyer.

See the Tax Authority’s official real-estate transaction declaration service and the rules on online real-estate tax reporting.

Advance payment of the seller’s capital gains tax

In certain taxable transactions, the buyer may be required to transfer part of the purchase price directly to the Tax Authority as an advance payment on account of the seller’s capital gains tax. This is not an additional tax imposed on the buyer. It is paid out of the agreed consideration and should be coordinated with the contractual payment schedule and the certificates required for registration.

For the seller’s side of the transaction, see taxes when selling an apartment in Israel.

Betterment levy and additional transaction costs

A municipal betterment levy is generally connected with planning improvements affecting the property and is commonly allocated to the seller for improvements approved before the transaction. The agreement must nevertheless define responsibility clearly and protect the buyer from liabilities that should be discharged by the seller.

The buyer should also budget for legal fees, brokerage, valuation, mortgage expenses, registration fees and, where necessary, engineering or planning advice. A new apartment from a developer may involve linkage, upgrades, connection expenses and registration costs under the contract and applicable law.

For a new-build purchase, see buying a new apartment from a developer.

Frequently asked questions

When is purchase tax paid

The transaction is reported within 30 days, and payment must be made by the date stated under the applicable law and assessment. A buyer should not assume that tax payment is postponed until possession is delivered.

Can a tax declaration be corrected

In appropriate circumstances, an application may be made to amend an assessment, for example when an error is discovered or a relevant fact changes. The application must be supported and submitted within the applicable legal framework.

Is purchase tax financed by the mortgage

Purchase tax and transaction expenses normally form part of the funds the buyer must arrange. Mortgage terms are determined by the lender, and the buyer should not assume that the loan will cover the tax.

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Updated September 28, 2026.