Real estate taxation · Implementation Instruction
Supplement No. 1 to Instruction No. 3: "Capital Declaration: Supporting Document for an Improvement Expense" in Implementation Instruction 28/87, Betterment Tax
Summary
The supplement to Implementation Instruction 28/87 directs the Real Estate Taxation offices on how to handle a request to deduct from the gain the expenses of building an apartment on the land, on the sale of a qualifying residential apartment that is liable to betterment tax, where the seller has no invoices, receipts or capital declaration. Under section 39 of the Law, the seller attaches a "Report on a Construction Expense Without Supporting Documents" form (Appendix A), and the Director estimates the construction costs on the basis of accepted price lists, after being satisfied that the seller incurred the expense and that it was not claimed under the Income Tax Ordinance. A seller who presents a works agreement and documentation of payments will be allowed the expense requested for construction before 1/1/2014, and for construction from that date onwards without VAT and without a contractor's profit at a rate of 15%. A seller who does not meet the burden of proof will be allowed a deduction according to a price list without VAT and without a contractor's profit, and in certain cases only 2/3 of the expenses or no deduction at all, depending on whether an accountant's confirmation is provided that the expense was not and will not be claimed for income tax.
The summary was written by the office and reflects the instruction as of its publication date. The binding text is the official Hebrew publication, and the instruction may have been updated or affected by later legislation and case law. The English title and summary are an unofficial translation.
Publication details
- Type
- Implementation Instruction
- Publication date
- 16.1.2025
- Topics
- Betterment tax, Reporting and procedures
- Sections of the Law mentioned
- 49ב 39 78ב
Related publications
Official document
Source: The publication on the Israel Tax Authority website (gov.il, Hebrew)
Suggested citation
Israel Tax Authority, Implementation Instruction, "Supplement No. 1 to Instruction No. 3: "Capital Declaration: Supporting Document for an Improvement Expense" in Implementation Instruction 28/87, Betterment Tax" (16.1.2025) [Hebrew]
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