A buyer's guide to purchase tax in Israel

Purchase tax (mas rechisha) is one of the largest costs a buyer faces, and it catches many people by surprise. Understanding how it works before you make an offer helps you budget accurately and negotiate from a position of confidence.

How purchase tax is calculated

Purchase tax in Israel is progressive: the property price is divided into brackets, and each bracket is taxed at its own rate. That means the effective rate you actually pay is almost always lower than the top bracket the property reaches.

Two things change your bracket table dramatically:

• Single home: if this is the only residential property you will own, you benefit from a lower, relief-oriented bracket table, including a tax-free portion up to a defined threshold.
• Additional home: if you already own residential property, an investor bracket table applies from the first shekel, at noticeably higher rates.

Plan before you sign

Because the difference between the single-home and additional-home tables can run into hundreds of thousands of shekels, the timing and structure of a purchase matter. Selling an existing home within the statutory window, buyer eligibility, and new-immigrant relief are all worth reviewing in advance.

You can estimate your own figure in seconds with our purchase tax calculator, which breaks the amount down bracket by bracket.

Note: brackets are updated periodically and individual circumstances vary. Always confirm the current figures with the Israel Tax Authority or your advisor before relying on them. This article is general information, not tax advice.