Purchase Tax (Mas Rechisha) in Israel for Foreign Buyers
A non-resident buying an Israeli apartment pays purchase tax (mas rechisha) of 8% on value up to ₪6,055,070 (≈ $1.64M) and 10% above, charged from the first shekel with no exempt band. On a ₪5,000,000 ($1.35M) home that is ₪400,000 (≈ $108,108). Residential brackets are frozen through January 2028.
What is purchase tax (mas rechisha)?
Purchase tax (mas rechisha) is the one-time tax an Israeli property buyer pays to the Israel Tax Authority (Rashut HaMisim) on acquiring real estate. It is the single largest add-on cost on a foreign purchase. The tax is progressive — applied in bands to slices of the price, not as one flat rate — but the schedule that applies to you depends entirely on your status: an Israeli resident buying a single (only) home gets a generous 0% starting band, while a non-resident — or anyone buying an additional property — is taxed from the first shekel. Citizenship is not the test; Israeli tax residency is. This page sets out both schedules, the gap between them, and worked examples at typical Tel Aviv prices.
Purchase-tax brackets: resident single home vs non-resident
The two schedules below are the current residential purchase-tax brackets, frozen in nominal shekels from 16 January 2025 to 15 January 2028. A non-resident buyer almost always falls on the right-hand schedule, because a foreigner who already owns (or is deemed to own) a home elsewhere is treated as an additional-property buyer. Amounts are shown in shekels; convert at the indicative rates noted below the table.
| Value band | Resident, single home | Non-resident / additional home |
|---|---|---|
| Up to ₪1,978,745 | 0% | 8% |
| ₪1,978,745 – ₪2,347,040 | 3.5% | 8% |
| ₪2,347,040 – ₪6,055,070 | 5% | 8% |
| ₪6,055,070 – ₪20,183,565 | 8% | 8% / 10%* |
| Above ₪20,183,565 | 10% | 10% |
*For the non-resident/additional-home schedule the split is simply 8% up to ₪6,055,070 and 10% above it. Indicative FX: ₪3.70/$1, ₪4.00/€1, ₪4.75/£1 — currency figures move, treat as approximate.
Worked examples: purchase tax at ₪3M, ₪5M and ₪8M
Because the schedule is progressive, the effective rate rises with price. The table below runs three representative Tel Aviv price points through both schedules — computed directly from the bracket bands above — so a foreign buyer can see the tax and the resident-vs-non-resident gap at their own budget. All figures assume second-hand residential property and standard status.
| Purchase price | Resident (single home) | Non-resident | Extra a non-resident pays |
|---|---|---|---|
| ₪3,000,000 ($0.81M) | ₪45,538 $12,308 · 1.5% eff. | ₪240,000 $64,865 · 8% eff. | ₪194,462 ≈ $52,557 |
| ₪5,000,000 ($1.35M) | ₪145,538 $39,335 · 2.9% eff. | ₪400,000 $108,108 · 8% eff. | ₪254,462 ≈ $68,773 |
| ₪8,000,000 ($2.16M) | ₪353,886 $95,645 · 4.4% eff. | ₪678,899 $183,486 · 8.5% eff. | ₪325,012 ≈ $87,841 |
On the ₪5,000,000 ($1.35M) reference apartment used across our foreign-buyer guide, a non-resident pays ₪400,000 (≈ $108,108) — a flat 8%, because the whole price sits below ₪6,055,070. The resident buying an only home pays about ₪145,538 (≈ $39,335). That ₪254,462 difference is the single biggest driver of the foreign-buyer cost premium.
Purchase tax on a typical Tel Aviv apartment
Our own pipeline tracks the Tel Aviv market a foreign buyer is actually shopping in. The median asking price across all tracked Tel Aviv-Yafo listings is currently ₪4,850,000 ($1.31M), based on n = 1,037 tracked active listings, July 2026 (methodology). Run that median price through the schedules above and a non-resident would owe roughly ₪388,000 (≈ $104,865) in purchase tax, versus about ₪138,038 (≈ $37,308) for a resident buying their only home. See how the wider market breaks down by neighborhood on our market data hub.
Who counts as a non-resident for purchase tax?
For mas rechisha the decisive question is Israeli tax residency, not which passport you hold. Someone who lives abroad and whose “centre of life” is outside Israel is treated as a non-resident buyer even if they hold an Israeli passport — while a foreign national who has made aliyah and settled in Israel may qualify for resident reliefs or the reduced oleh rate. The single-home 0% band, in particular, is available only to an Israeli resident buying their one and only home; a buyer who owns property anywhere is taxed on the additional-home schedule. Because the classification is fact-specific and drives a six-figure difference, confirm your status with a licensed Israeli real-estate lawyer before budgeting.
The 2025–2028 bracket freeze
Israel’s residential purchase-tax brackets normally rise each 16 January with the consumer price index. For the current window they do not: the thresholds are frozen in nominal shekels from 16 January 2025 to 15 January 2028. In practice that means the ₪1,978,745 exempt-band ceiling (for residents) and the ₪6,055,070 8%-to-10% threshold (for everyone) stay fixed through the freeze — so as prices rise, a slowly growing share of each purchase is taxed at the higher rate. The figures on this page are the frozen brackets, current as of July 2026; we will update them when the freeze ends. Always verify the live thresholds against the Israel Tax Authority before relying on them.
Frequently asked questions
How much is purchase tax for a non-resident buyer in Israel?
Most non-residents pay purchase tax (mas rechisha) of 8% on value up to ₪6,055,070 (≈ $1.64M) and 10% on any value above that, charged from the first shekel with no exempt band. On a ₪5,000,000 (≈ $1.35M) apartment that is ₪400,000 (≈ $108,108). Residential brackets are frozen through January 2028.
Do non-residents pay more purchase tax than Israeli residents?
Yes, substantially. An Israeli resident buying their only home gets a 0% band on the first ₪1,978,745 and reduced rates above it; a non-resident (or anyone buying an additional home) is taxed at 8%/10% from the first shekel. On a ₪5,000,000 home the resident single-home charge is about ₪145,538 versus ₪400,000 for a non-resident — a gap of roughly ₪254,462 (≈ $68,773).
What is the purchase tax on a ₪5 million apartment in Tel Aviv?
For a non-resident buying a ₪5,000,000 (≈ $1.35M) apartment, purchase tax is a flat 8% — ₪400,000 (≈ $108,108) — because the whole price sits under the ₪6,055,070 threshold. An Israeli resident buying their only home at the same price would pay about ₪145,538 (≈ $39,335).
Are Israeli purchase-tax brackets changing in 2026?
No. Residential purchase-tax brackets are frozen in nominal shekels from 16 January 2025 to 15 January 2028, so they do not receive the usual annual CPI indexation during that window. The thresholds in this guide are the current frozen figures; verify against the Israel Tax Authority before the freeze ends.
Is there a 0% purchase-tax band for foreign buyers?
No. The 0% band on the first ₪1,978,745 applies only to an Israeli resident buying a single (only) home. Non-residents — and residents buying an additional property — get no exempt band and pay 8% from the first shekel, rising to 10% above ₪6,055,070.
Do olim (new immigrants) get a purchase-tax discount?
Often, yes. New immigrants may qualify for a reduced "oleh" purchase-tax rate on one home within a statutory period around their aliyah. Whether the oleh track beats the standard single-home track depends on the price, and eligibility is fact-specific — confirm your status and the current oleh rate with a licensed Israeli real-estate lawyer.
When is purchase tax paid, and to whom?
Purchase tax is self-assessed and paid to the Israel Tax Authority (Rashut HaMisim) shortly after the transaction — in practice your Israeli real-estate lawyer files the return and arranges payment within the statutory deadline from the signing date, before the transfer can be registered in the Tabu (Land Registry).
Where this fits in the buying guide
Purchase tax is one line — the largest — in a non-resident’s all-in cost. For the full picture, the foreign-buyer guide sets out the whole transaction and the All-In Landed Cost Index, and the buying guide hub links every stage — eligibility, mortgages for non-residents, the step-by-step process, and lawyers’ fees — as each page is published.
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