As a real estate broker in the Jezreel Valley, I often encounter questions from buyers about purchase tax. Below is basic and important information that will help you plan the cost of the purchase.
Purchase tax is one of the most important economic components to consider when purchasing real estate. This is a tax imposed by the state on any purchase of real estate, whether it is an apartment, house, or agricultural land.
What is purchase tax?
Purchase tax is a one-time tax that buyers must pay to the state when purchasing real estate. The amount of the tax is determined by a certain percentage of the value of the property being purchased, with the percentages varying depending on the type of property and the identity of the buyer. For example, buyers who are Israeli residents may pay a different tax than buyers who are not Israeli residents.
How is the tax amount determined?
The amount of the purchase tax is determined according to the tax brackets set forth in the law, which are updated from time to time. The brackets are determined primarily based on the value of the property, with the higher the value of the property, the higher the tax rate. In addition, there are cases in which the law provides tax relief,
For example, for first-time home buyers, below are the purchase tax brackets for 2025.
When purchasing a real estate property in 2025, the updated purchase tax brackets must be taken into account. These brackets vary depending on the type of property and the identity of the purchaser: First apartment (single apartment) for an Israeli resident:
Up to 1,978,745 NIS: tax exempt.
1,978,745 NIS – 2,347,040 NIS: 3.5%.
2,347,040 NIS – 6,055,070 NIS: 5%.
6,055,070 NIS – 20,183,565 NIS: 8%.
Over 20,183,565 NIS: 10%.
Second apartment or higher (additional apartment):
Up to NIS 6,055,070: 8%.
Over 6,055,070 NIS: 10%.
Additional facilities:
New immigrants: Pay 0.5% on the value up to NIS 1,988,090 and 5% on the value above this amount.
Disabled, blind, injured and family members of soldiers who died, as well as inherited property: may receive reduced tax or a full exemption depending on their situation and the value of the apartment purchased.
Summary
When purchasing real estate in the Jezreel Valley and anywhere else, it is important to be aware of the purchase tax and include it in the financial planning of the transaction. It is recommended and important to consult with professional advisors in order to understand all the legal and financial aspects involved in this tax. A thorough understanding of the purchase tax can help you make smart and informed decisions in purchasing your next property. It is imperative to ensure that all data is reviewed and documented by a qualified lawyer.
Planning to buy or purchase an apartment? Contact us without any obligation 052-6481725 Lior Zahavi
