Purchase tax 2026: brackets, reliefs and costly mistakes

How is purchase tax calculated?

Purchase tax is imposed on the purchaser of a right in real estate under the Real Estate Taxation (Betterment and Acquisition) Law. For a residential apartment the calculation is made in brackets: each portion of the apartment's value is taxed at the rate of the bracket into which it falls, rather than the entire value being taxed at the highest bracket. The decisive question is whether this is your sole apartment or an additional apartment, because the difference between the two tracks sometimes reaches hundreds of thousands of shekels.

Purchase tax brackets as of 2026

The amounts below have been frozen by legislation and are not index-linked in the 2025 to 2027 tax years, so they also apply to transactions signed in 2026.

In practice, this means that a purchaser of a sole apartment worth NIS 2 million will pay very little tax, whereas a purchaser of an additional apartment of the same value will pay a flat rate of eight per cent from the first shekel. This is exactly where proper planning changes the outcome. For an initial self-check you can also use the purchase tax calculator (simulator) on the Israel Tax Authority website, but it does not determine whether the apartment counts as a sole apartment.

When does an apartment count as a sole apartment?

The definition is not always intuitive. Even someone who owns a small share in another apartment may lose sole-apartment status, and someone who holds two apartments at the same time may, in certain circumstances, be treated as owning a sole apartment. Points that recur in transactions:

• Replacement apartment. Someone who buys a new apartment before selling the previous one may be treated as owning a sole apartment, provided that the old apartment is sold within the period prescribed by law. Missing the deadline requires payment of the tax difference.
• An inherited share in an apartment. Holding a small share in an additional apartment does not necessarily negate sole-apartment status, subject to conditions.
• Spouses and minor children. For purchase tax purposes the family unit is generally examined as a single unit, rather than each spouse separately. Separation of property between spouses may affect this in certain circumstances.
• An apartment abroad. Owning an apartment outside Israel may be relevant to the assessment of sole-apartment status.

Special reliefs and benefits

Alongside the regular tracks there are special tracks, including a preferential rate for a new immigrant buying an apartment, reliefs for people with disabilities, blind people and victims of hostile action and their families, and benefits on transfers between relatives and transfers without consideration. Each track is subject to eligibility conditions and time limits, and some require a dedicated application to be filed alongside the report of the transaction. If you think one of them may apply to you, it is worth checking before signing rather than afterwards.

Reporting and payment deadlines

The transaction is reported to the Real Estate Taxation Office within 30 days of the date of the transaction. The self-assessment filed with the report is the basis for payment, and the Office may amend it. Late reporting or payment incurs interest, linkage differentials and sometimes fines. It is important to understand that the period runs from the date of signing, not from the date of delivery or the date the mortgage is received.

Six mistakes that come up again and again

1. A wrong assumption about the apartment's status. Relying on the apartment being a sole apartment without checking the rules, and above all without checking apartments owned by your spouse.
2. Ignoring the deadline for selling the previous apartment. Someone who bought a replacement apartment and missed the sale deadline pays the difference between the tracks, plus linkage and interest.
3. Failing to include the entire consideration in the value. Incidental payments, obligations assumed by the purchaser and non-cash consideration may be included in the value for tax purposes.
4. Late reporting. Thirty days pass quickly, especially when the parties are waiting for mortgage approval.
5. Failing to apply for relief. Some benefits are not granted automatically and require an express application with supporting documents.
6. Relying on outdated amounts. Rates and amounts change through legislation and implementation directives. They should be verified as at the date of the transaction.

How do you check your own calculation?

For a quick calculation by transaction date and type of purchaser, you can use our purchase tax calculator, which is based on the official brackets. The Israel Tax Authority also operates a purchase tax simulator, which is a good tool for an initial estimate. It is no substitute for a case-specific review, because the complex questions, above all the apartment's status and the conditions for reliefs, are legal questions rather than arithmetical ones. In a transaction where the gap between the tracks is large, an early review is the most worthwhile investment in the entire process.