June 23, 2015
On June 22, 2015, the Knesset approved a decision to completely change the tax brackets for purchases of an additional residential apartment in Israel for Israeli residents (including foreign residents purchasing an apartment in Israel) for the next 5 years.
This is yet another way to encourage Israeli residents not to invest their money in purchasing homes for rental income purposes. By cooling the demand, Israel’s Finance Ministry hopes to achieve lowering the prices thus opening up more real estate options for Israeli residents that want to purchase their only home
The brackets applicable as of June 24, 2015, until December 31, 2020, are:
|
Apartment Value |
Tax Rate |
|
up to NIS 4,800,605 |
8% |
|
above NIS 4,800,605 |
10% |
In addition, the Knesset approved the decision to maintain the existing tax brackets for purchases of an additional residential apartment in Israel for Israeli residents (including foreign residents purchasing an apartment in Israel) that were supposed to expire on June 30, 2015.
The tax brackets that will be applicable after December 31, 2020 are:
|
Apartment Value |
Tax Rate |
|
Up to NIS 1,162,120 |
5% |
|
From NIS 1,162,120 to NIS 3,486,350 |
6% |
|
From NIS 3,486,350 to NIS 4,800,605 |
7% |
|
From NIS 4,800,605 to NIS 16,002,015 |
8% |
|
Over NIS 16,002,015 |
10% |
The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.