Israeli Real Estate Tax & Transaction Costs
What Overseas Buyers and Sellers Should Know
Tax and transaction costs can materially affect the economics of an Israeli property transaction. They should be considered before the agreement is signed, not after it.
Purchase Tax
Purchase tax is generally paid by the buyer and the applicable treatment can depend on the type of property, the buyer’s circumstances and residency status. Current thresholds and rates change over time and should be checked for the specific transaction.
Capital Gains Tax
A seller’s Israeli capital gains tax position can depend on the property, acquisition history, allowable expenses, use of the property and the availability of any relevant exemption or relief.
Betterment Levy
Municipal betterment levy is distinct from capital gains tax and may arise from planning-related increases in value. Its potential impact should be examined separately.
Other Transaction Costs
Depending on the transaction, costs may include legal fees, brokerage, financing and banking costs, registration expenses, professional inspections and valuations, and costs associated with obtaining required documents or approvals.
Developers, Land and Inherited Property
Purchases from developers, transactions involving land and sales of inherited property can each raise additional tax and cost considerations that should be reviewed in context.
Tax Reporting
Israeli real estate transactions are subject to statutory reporting requirements and deadlines. The relevant filings should be coordinated with the transaction timetable.
As part of my real estate representation, I address the Israeli real estate tax aspects of the transaction and, where a matter requires separate specialist advice, coordinate with the appropriate professional.