Introduction
Purchasing real estate in Israel entails immediate tax implications that must be anticipated in advance. The taxation applicable at the time of acquisition mainly concerns purchase tax, related reporting obligations, and the legal framework governing these levies.
This article provides a general, structured, and institutional overview of the tax rules applicable to real estate purchases in Israel, taking into account the regulations in force for 2026, without replacing professional or personalized advice.
General principles of taxation at purchase
Real estate taxation at the time of purchase in Israel is based on the principle that any acquisition of real property rights may give rise to specific taxation. This taxation applies regardless of the intended use of the property, whether as a primary residence, an investment property, or for another purpose.
As a rule, the taxable event occurs upon signing the purchase agreement, even if the payment of the purchase price is spread over time.
Purchase tax – rules applicable in 2026
Purchase tax is the main tax payable by the buyer when acquiring real estate in Israel. It is calculated based on the value of the property and the buyer’s tax status.
For the years 2025–2026, the Israeli authorities have maintained a freeze on the purchase tax brackets, meaning that the thresholds are not indexed to inflation and remain unchanged for 2026.
Purchase of a primary residence (Israeli tax resident)
When purchasing a primary residence, purchase tax is calculated using a progressive scale. Indicative brackets currently applicable are as follows:
- Up to approximately ILS 1,978,745: 0%
- From ILS 1,978,745 to approximately ILS 2,347,040: 3.5%
- From ILS 2,347,040 to approximately ILS 6,055,070: 5%
- From ILS 6,055,070 to approximately ILS 20,183,565: 8%
- Above this threshold: 10%
The tax is calculated by brackets: only the portion of the purchase price falling within each bracket is taxed at the corresponding rate.
Purchase of an additional property, investment property, or non-resident purchase
When the acquisition does not qualify as a primary residence (second home, investment property, or, in certain cases, a purchase by a non-resident), purchase tax is generally higher and may apply from the first shekel, with rates reaching 8% and then 10% depending on the value of the property.
The exact rules depend on the buyer’s tax status and must be verified using the official calculation tools.
Distinction between residents and non-residents
Israeli tax law distinguishes between tax residents and non-residents based on specific legal criteria. This distinction may directly affect applicable tax rates, access to certain tax benefits, and reporting obligations related to the real estate purchase.
Nationality or administrative residence alone is not sufficient to determine tax residency.
Reporting obligations related to the purchase
Any acquisition of real property rights in Israel must be reported to the tax authorities within strict statutory deadlines. This reporting obligation applies even if the amount of tax is disputed or if payment is deferred.
Failure to comply with reporting requirements may result in financial penalties, late-payment interest, and additional administrative sanctions.
Interaction with specific exemption regimes
Certain buyers may benefit from specific tax regimes or exemptions provided by law, subject to meeting defined conditions. These arrangements constitute regulated exceptions to the general tax framework and are addressed in dedicated articles.
This article is limited to presenting the general tax framework applicable at the time of purchase.
Conclusion
Taxation when purchasing real estate in Israel is a central component of any real estate transaction. A clear understanding of purchase tax, the brackets applicable in 2026, and the related reporting obligations allows buyers to approach the acquisition within a secure and compliant legal framework.
This article is strictly informational and does not replace professional advice tailored to individual circumstances.
Institutional sources and official tools
- Real Estate Taxation – Official Government Topic Page (GOV.IL)
https://www.gov.il/he/departments/topics/realty_taxation/govil-landing-page - Israel Tax Authority – Official Government Department Page
https://www.gov.il/he/departments/israel_tax_authority/govil-landing-page - Official Purchase Tax Calculator (misim.gov.il)
https://www.misim.gov.il/svsimurechisha/FrmFirstPage.aspx?cur=1#nbb - Official Guide “Seller / Buyer of Real Estate Rights – 2025”
http://masmak2025.mag.calltext.co.il/pages/11
This article is provided for informational purposes only and does not constitute legal advice.