Real Estate Taxation — Jerusalem
Real Estate Purchase Tax 2026
Brackets & Calculation
Updated Purchase Tax (Mas Rechisha) brackets for 2026, exemptions, reliefs and how to save — with Adv. Liron Yitzhak Elmaliach.
What Is Real Estate Purchase Tax?
Real Estate Purchase Tax is a one-time tax levied on the buyer of a real estate property — apartment, land, plot, house, commercial building and more. It is levied on the buyer (unlike Capital Gains Tax, which is levied on the seller) and calculated based on the value of the acquired property. The tax rate depends on whether the acquired property is the buyer's sole residential property, an additional property, or a non-residential property.
The brackets are updated each January in line with changes in the consumer price index. It is therefore important to check the current brackets when conducting a transaction. The difference between the "sole property" and "additional property" brackets can reach tens or even hundreds of thousands of shekels in a single transaction.
Checking the Purchase Tax position — like all real estate tax — must be done before signing the contract. Proper tax planning at the negotiation stage can lead to significant savings. After signing, it is difficult to restructure the transaction.
Sole Residential Property Brackets — 2026
A buyer for whom the purchased property is their sole residential property is entitled to reduced tax brackets. In 2026 the brackets are (approximate, numbers updated in January):
| Property Value | Tax Rate |
|---|---|
| Up to approx. ₪1,919,155 | 0% (Exempt) |
| Approx. ₪1,919,155 to ₪2,276,360 | 3.5% |
| Approx. ₪2,276,360 to ₪5,872,725 | 5% |
| Above approx. ₪5,872,725 | 10% |
Example: apartment priced at ₪2,500,000 — the zero-rate applies to the first ₪1,919,155. The next ₪357,205 (up to ₪2,276,360) are taxed at 3.5%, and the remaining ₪223,640 at 5%. Total tax: approximately ₪23,700 only.
Additional (Non-Sole) Property Brackets — 2026
Someone purchasing a property that is not their sole residential property is subject to significantly higher tax rates. There is no zero-rate bracket — tax is calculated from the first shekel:
| Property Value | Tax Rate |
|---|---|
| Up to approx. ₪5,872,725 | 8% |
| Above approx. ₪5,872,725 | 10% |
Example: an investment property priced at ₪2,000,000 — Purchase Tax will be ₪160,000 (8%). Compared to if it were a sole property — the tax would be only approximately ₪2,863. The difference is hundreds of thousands of shekels — it is important to plan ahead.
Special Exemptions — Who Qualifies?
Home Upgraders: Someone who sells their existing property and purchases a new one — may purchase under the "sole property" brackets provided they sell the old property within 18 months. This time window is critical — failure to comply will result in the tax difference being collected.
New Immigrants (Olim Chadashim): A new immigrant who purchases a property in their first year of immigration (and up to 7 years afterwards, under conditions) is entitled to a reduced tax rate of 0.5% on the first property. This benefit may also be used for non-residential properties.
Persons with Disabilities: Someone recognised as having a total disability who meets the conditions — may be completely exempt from Purchase Tax on their sole residential property. Holocaust survivors and bereaved families benefit from similar reliefs. An application must be submitted together with medical documentation.
Frequently Asked Questions — Real Estate Purchase Tax
Detailed answers to the most common questions about Israeli Purchase Tax
Free Initial Consultation
Adv. Liron Yitzhak Elmaliach — Real Estate Taxation
Before you buy — check the Purchase Tax that will apply to you. First meeting at no charge. 33 HaShneim Asar, Pisgat Ze'ev, Jerusalem.
← All Real Estate Services