Real estate taxation · Position Paper
Professional Position Paper No. 04/2025, Israel Tax Authority. Field: Real Estate Taxation Law. Subject: Clarification regarding the tax exemption on rent received in urban renewal transactions
Summary
Position Paper 04/2025 clarifies that the rent paid by the developer to residents in an evacuation and reconstruction or TAMA 38 project under the demolition and construction track (TAMA 38/2), for the period from the demolition of the apartment until possession of the replacement apartment is received, is included in the exemption from betterment tax under sections 49KB(a)(1) and 49LC1(a)(1) of the Law. In the position of the Israel Tax Authority, the exemption does not depend on the use the seller made of the apartment on the eve of the transaction, even if it was let to a third party. Accordingly, these payments need not be reported as income chargeable to income tax and no tax is to be withheld from them at source.
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
- Position Paper
- Number
- 4/2025
- Publication date
- 9.7.2025
- Topics
- Urban renewal, Betterment tax
- Sections of the Law mentioned
- 49כב
Official document
Source: The publication on the Israel Tax Authority website (gov.il, Hebrew)
Suggested citation
Israel Tax Authority, Position Paper 4/2025, "Professional Position Paper No. 04/2025, Israel Tax Authority. Field: Real Estate Taxation Law. Subject: Clarification regarding the tax exemption on rent received in urban renewal transactions" (9.7.2025) [Hebrew]
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