What is the purchase tax in Israel for foreigners?
This is the line that separates a resident’s purchase from a purchase made from abroad. No stamp duty, no transfer tax, no notary, but a purchase tax computed on a schedule specific to non-residents. Here is the schedule, what it gives on four prices, and the way out if you make aliyah.
The short answer
In 2026 a non-resident buyer pays a mas rechisha (purchase tax) of 8% of the price up to ₪6,055,070 and 10% on the part above, whatever their passport and even if it is their only home anywhere. This schedule, the same as a resident investor’s, is frozen until 15 January 2028. On ₪2.5M the tax is ₪200,000, against ₪20,538 for a resident buying their only home and ₪2,606 for an oleh. If you become an Israeli resident within two years of the purchase, the tax is recalculated on the resident schedule and the difference refunded. The return is filed within 30 days and paid within 60 days, by the lawyer.
The figures to remember, November 2026
- Non-resident rate
- 8% then 10%
- Threshold for the 10% rate
- ₪6,055,070
- Window to become a resident
- 2 years
- Brackets frozen until
- 15 Jan 2028
The non-resident schedule: two brackets, no allowance
The Real Estate Taxation Law reserves the “only home” schedule (dira yechida), with its 0% bracket up to ₪1,978,745, for Israeli residents. Every other home buyer, resident investors and non-residents alike, falls under the “additional home” schedule (dira nosefet): 8% up to ₪6,055,070, 10% above. There is no 0% bracket, no allowance, no cap. The tax is progressive by slice: on ₪7M, the first ₪6,055,070 are taxed at 8% and the remaining ₪944,930 at 10%.
A non-resident for tax purposes is someone who is not an Israeli tax resident on the day of signing. Nationality is irrelevant: an Israeli citizen living in London pays 8%, an American whose centre of life is in Haifa pays the resident schedule. The thresholds are normally indexed every 16 January; the 2025-2026 Arrangements Law froze indexation until 15 January 2028, which slightly raises the effective tax as prices climb.
For an instant figure on your price and status, use the purchase tax calculator. The complete guide, with every special case (inheritance, gift, exchange, buying as a couple), is in mas rechisha 2026.
Resident, non-resident, oleh: the table on four prices
The amounts below are computed on the exact 2026 brackets, for a buyer who owns no other home in Israel.
| Property price | Resident, only home | Non-resident (or investor) | Oleh, only home |
|---|---|---|---|
| ₪1,500,000 | ₪0 | ₪120,000 | ₪0 |
| ₪2,500,000 | ₪20,538 | ₪200,000 | ₪2,606 |
| ₪4,000,000 | ₪95,538 | ₪320,000 | ₪10,106 |
| ₪7,000,000 | ₪273,886 | ₪578,899 | ₪95,976 |
The gap is widest on properties between ₪1.5M and ₪2.5M, where the resident pays almost nothing: ₪120,000 versus zero on ₪1.5M. Above ₪6M the gap narrows in proportion, as the resident also enters the 8% and 10% brackets. The oleh schedule (0% up to ₪1,978,745, then 0.5% up to ₪6,055,070) applies to purchases made between 15 August 2024 and 15 January 2028, from one year before aliyah to seven years after.
Breakdown by bracket
| Bracket | Rate | Tax |
|---|
Brackets of 16 January 2025, frozen until 15 January 2028 (Arrangements Law). A non-resident is taxed as an additional-home buyer unless they become an Israeli resident within two years of the purchase. Payment is due within 60 days of signing.
Becoming a resident within two years: recalculation and refund
The law provides a precise way out: a buyer who becomes an Israeli resident within two years of the purchase date is treated retroactively as a resident. If they own no other home, the only-home schedule applies, and the Tax Authority refunds the excess, with interest and indexation from the payment date. An oleh who buys in the year before aliyah combines this rule with the oleh schedule.
- At purchase, the lawyer files on the non-resident schedule and pays 8% (or, in some cases, files a conditional return asking for the resident schedule against a guarantee; this option depends on the regional office).
- You establish residence: teudat oleh or residence visa, address, centre of life in Israel. The two-year clock runs from the contract date.
- Request for amendment (tikun shuma) to the competent mas rechisha office, with proof of residence. The Tax Authority recalculates and refunds the difference, usually within 3 to 6 months.
Conversely, a resident who benefited from the only-home schedule and later leaves Israel faces no clawback: status is assessed on the purchase date and within the two-year window that follows.
Return within 30 days, payment within 60: who does what
The purchase tax return (hatsharat rechisha) must reach the Tax Authority within 30 days of signing the contract, and the tax must be paid within 60 days. Your lawyer handles it online through the Tax Authority’s filing system. They attach the contract, your passport, your status (resident, non-resident, oleh) and the self-assessment of the tax. There is no escrow company or title company doing this, as in a US closing: the lawyer is the filer.
Payment is made by transfer from your Israeli account or, for a buyer without one, by international wire to the lawyer’s trust account, who pays on your behalf. Once the tax is paid, the Tax Authority issues the certificate (ishur mas rechisha) without which the Tabu refuses the final registration in your name. The seller, for their part, supplies the mas shevach (capital gains tax) certificate. Both documents are conditions of the transfer of title.
Worked example: ₪2.5M in Netanya, then aliyah 14 months later
| Mas rechisha paid at purchase (non-resident schedule, 8%) | ₪200,000 |
| Oleh schedule after recalculation (0% up to ₪1,978,745, 0.5% above) | ₪2,606 |
| Refund obtained on amendment request | ≈ ₪197,394 + interest and indexation |
| Same purchase without aliyah or residence within 2 years | ₪200,000, final |
| Resident only-home tax, for comparison | ₪20,538 |
The date is what matters: aliyah must be effective, with the centre of life in Israel, within 24 months of the contract. A six-month slip on an aliyah plan can cost close to ₪200,000 here. The figure for your property is on the purchase tax calculator; the wider tax picture of relocating (income tax, the ten-year exemption for olim) is covered on Shekel Guide.
Frequently asked questions
Who counts as a “non-resident” for purchase tax?
Anyone who is not an Israeli tax resident on the day of signing, whatever their nationality. An Israeli citizen who has lived in New York for ten years is a non-resident and pays 8%. Conversely, a foreigner settled in Israel on a residence visa is a resident. The test is the centre of life: home, family, job, and more than 183 days a year.
Is the tax computed on the contract price?
Yes, on the full price, parking and storage included, VAT included on a new build. The Tax Authority can substitute market value if the price looks understated. Furniture sold separately is not taxed, provided its value is realistic and itemised in the contract.
Does a couple with only one resident spouse pay 8%?
The Tax Authority treats spouses as one unit: if one is an Israeli resident and the couple owns no other home, the resident only-home schedule generally applies to the whole property. The reverse (an existing home in one spouse’s name) tips the purchase into the additional-home schedule. Have the lawyer confirm before signing.
What happens if I pay late?
Interest and CPI indexation run from the 61st day after signing, plus a penalty for a late return beyond 30 days. Above all, without the payment certificate the final Tabu registration is blocked: the seller cannot transfer title to you.
How we work
Every amount, bracket and rate on this page is checked against the official source listed at the bottom and dated. When a schedule or rate changes, the page is updated within days. Our methodology.
Sources
A question about your purchase tax?
Uncertain status, aliyah planned, buying with a resident spouse, inherited property: an English-speaking real estate lawyer computes your mas rechisha and files the return. Describe your case.