Since July 29, 2024, new Israeli legislation has been providing significant tax benefits to new immigrants (olim) on the purchase of their first property in Israel. This reform aims to lighten the financial burden on olim hadashim by significantly lowering the tax rates on their initial real estate purchase.
New Tax Rates
The applicable rates are as follows:
| Rate | Price Range | Apartment Details - Example | Example for Oleh Hadash with Calculation | Example for Israeli with Calculation | Links to Listings |
|---|---|---|---|---|---|
| 0% | Up to 1,980,000 NIS | 2.5 rooms in Bat Yam - Price 1,790,000 NIS | 1,790,000 NIS x 0% = 0 NIS | 1,790,000 NIS x 0% = 0 NIS | Bat Yam |
| 0.5% | Between 1,980,000 and 6,000,000 NIS | 5 rooms in Netanya - Price 2,980,000 NIS | (2,980,000 - 1,980,000) NIS x 0.5% = 5,000 NIS | (2,980,000 - 1,919,155) NIS x 0% + (2,276,360 - 1,919,155) NIS x 3.5% + (2,980,000 - 2,276,360) NIS x 5% = 47,684 NIS | Netanya |
| 8% | Between 6,000,000 and 20,000,000 NIS | 4.5 rooms in Tel Aviv - Price 9,750,000 NIS | (9,750,000 - 6,000,000) NIS x 8% = 300,000 NIS | (1,919,155 - 1,980,000) x 0% + (2,276,360 - 1,919,155) x 3.5% + (5,872,725 - 2,276,360) x 5% + (9,750,000 - 5,872,725) x 8% = 502,502 NIS | Tel Aviv |
Conditions for Reduction Benefits
Tax benefits are only applicable if the property is used as a primary residence. Investment properties do not qualify for these reductions. Moreover, properties valued over 20,000,000 NIS do not benefit from these reduced rates. The Israeli Tax Authority has also strengthened proof requirements that the property is being used as the primary residence to prevent misuse.
This aid, approved by the Knesset's Finance Committee, will take effect on August 15. It applies to new immigrants who have immigrated within the last seven years and have not yet purchased housing. This measure primarily aims to support newly arrived young couples, taking into account price differences from their home countries. At its peak, this assistance could reach approximately 175,000 shekels for olim.
Encouragement for Immigration
The Israeli government is committed to facilitating the integration of new immigrants. This tax reduction sends a strong signal encouraging Jews worldwide to settle in Israel. Finance Minister Bezalel Smotrich emphasized that the State of Israel is fully committed to supporting new immigrants by making their settlement easier. The Minister of Immigration and Integration, Ofir Sofer, noted that this measure assists newcomers in adapting and encourages those considering making their Aliyah.
The reform of the purchase tax for new immigrants marks a significant advancement in the integration of olim into Israeli society. By making property purchases more financially accessible, this legislation promotes Aliyah and the development of new communities in Israel. Purchasing property in Israel is now more accessible than ever for new immigrants.
Discover our real estate offerings on our search page. Our platform offers a vast selection of properties tailored to all budgets and needs, directly in English. Use our filters to quickly find the apartment or house of your dreams.