Higher Taxes for Purchasers of Israeli Residential and Commercial Real Estate
At the end of July 2013 a new bill was passed raising purchase tax in several ways.
In every real estate transaction in Israel the purchaser is required to pay purchase tax. If the apartment purchased is the only apartment owned by the purchaser he will pay a lower purchase tax. However, if the apartment is an additional apartment then the purchase tax is higher.
Changes were made to the purchase tax levels and the percentages of the tax of the different levels. For apartments over 4,500,000 NIS two new tax levels, of 8% and 10%, were added regardless of whether or not this is an “only” apartment for the purchaser.
Another change affects foreign residents. Foreign residents will now always pay according to the higher purchase tax level even if they are purchasing their only apartment in Israel, unless they make aliya within 24 months of the purchase.
It is important to note that the purchase tax on land and commercial properties was raised from 5% to 6% of the price.
When you crunch the numbers this means higher purchase tax for everyone with perhaps the only break being for Israeli buyers who are buying an inexpensive “only” apartment.
You can see the current rates for purchase tax here.
Stay tuned for more updates on the new changes in Israeli Land Taxes.