Introduction
Purchasing real estate in Israel involves, in addition to the purchase price, the payment of various taxes and fiscal charges governed by Israeli law. Understanding these tax obligations is essential in order to anticipate the total cost of a real estate transaction. This stage follows the legal review of the property and precedes the final registration of ownership rights.
General framework of real estate taxation at purchase
Real estate taxation in Israel is primarily based on taxes levied at the time the transaction is completed.
Principle of acquisition taxation
When purchasing real estate, the buyer is subject to specific taxes calculated according to the value of the property, its nature and the buyer’s status.
The key steps of a real estate purchase in Israel
Purchase tax (Mas Rehisha)
The main tax applicable when purchasing real estate in Israel is the purchase tax, known as Mas Rehisha.
Definition of Mas Rehisha
Mas Rehisha is a tax collected by the Israeli tax authorities upon the acquisition of real estate. It is calculated on a progressive scale and depends on several criteria, including the type of property and the buyer’s status.
Rates and application criteria
The amount of Mas Rehisha varies according to the declared value of the property and whether the purchase concerns a primary residence or an investment property.
Differences in taxation according to buyer profile
The applicable tax regime may vary depending on the buyer’s personal and fiscal situation.
Residents and non-residents
Tax rates and exemptions may differ between Israeli residents and non-residents, depending on the regulations in force at the time of purchase.
Primary residence or investment property
The tax system also distinguishes between the acquisition of a primary residence and that of an investment property, directly affecting the level of taxation.
Other taxes and costs related to the purchase
In addition to Mas Rehisha, other fiscal and administrative costs may be associated with a real estate acquisition.
Additional taxes and fees
These may include local taxes, registration fees or costs related to administrative procedures required to complete the transaction.
The Israeli land registry (Tabu)
Importance of tax planning in a purchase project
Considering applicable taxes from the planning stage is essential.
Assessment of total acquisition cost
Accurate estimation of taxes and fees makes it possible to assess the real cost of the purchase and avoid financial surprises.
Securing the transaction
A clear understanding of tax obligations helps secure the real estate purchase and ensure compliance with Israeli regulations.
Conclusion
Real estate taxation applicable at purchase in Israel is a key component of any acquisition project. Purchase tax and related charges must be integrated from the outset into the financial analysis. This approach allows buyers to proceed with confidence and to prepare, where relevant, for the tax obligations linked to holding or reselling the property.
Real estate taxation in Israel: ownership and resale