Real estate taxation
Purchase tax for foreign residents: why a first apartment in Israel is taxed as an additional one
Foreign residents, including Israelis whose centre of life is abroad, pay high purchase tax even on their first apartment in Israel. Here are the rates, the exception for those who immigrate or return, and what else is worth knowing.
Why does a foreign resident not get the single-apartment brackets?
Section 9(c1c)(2) of the Law grants the reduced brackets to an "individual Israeli resident" buying a single apartment. A buyer who is not an Israeli resident pays the additional-apartment brackets, which under the temporary provision until 31 December 2026 are 8% and 10%. More: purchase tax on a second apartment.
Who is an Israeli resident?
- Under the centre-of-life test of the Income Tax Ordinance, not by citizenship. An Israeli citizen whose centre of life is abroad may be a foreign resident.
- Extension in the Law. "Israeli resident" also includes a person who, within two years of buying the apartment, became an Israeli resident for the first time or a senior returning resident (section 9(c1c)(4)(b)).
A worked example
An apartment worth NIS 3,000,000, the buyer's only one:
- Foreign resident: 8% = NIS 240,000.
- Israeli resident, single apartment: about NIS 45,538.
The difference, about NIS 194,000, shows why residency status is worth checking before signing, especially for anyone planning to immigrate or return to Israel.
New immigrants
New immigrants have a separate preferential track in the Purchase Tax Regulations (regulation 12a). It applies to a purchase within a period set around the date of immigration, is granted only once, and does not apply to an apartment worth more than NIS 20,183,565.
What else should a foreign resident buying in Israel know?
- Power of attorney. When the buyer is abroad, the transaction is usually carried out under a power of attorney signed before a notary or at a consulate, sometimes with an apostille. Details: notarial power of attorney.
- A future sale. A foreign resident is entitled to the capital gains exemption on a qualifying residential apartment only if he has no residential apartment in the country of residence, and must present confirmation from the tax authorities there (section 49a).
- Financing. Israeli banks set different financing terms for foreign residents. It is worth checking in advance.
Related articles and pages: Purchase tax on a second apartment | Purchase tax 2026: brackets and reliefs | Purchase tax calculator | Buying a second-hand apartment
Sources
- Real Estate Taxation (Capital Gain and Purchase) Law, 5723-1963: section 9, including (c1c)(2) (single apartment for an individual Israeli resident), (c1c)(4)(b) (definition of "Israeli resident") and (c1f) (additional apartment); section 49a (exemption for a foreign resident). Hebrew text on Wikisource.
- Real Estate Taxation (Capital Gain and Purchase) (Purchase Tax) Regulations, 5735-1974: regulation 12a (benefit for a new immigrant).
Checked on 11 November 2026.
Questions and answers
I am an Israeli citizen living abroad. Will I pay as a foreign resident?
It depends on your centre of life, not on citizenship. Home, family, work and income are examined.
I am immigrating in a year. Is it worth buying now?
A buyer who becomes an Israeli resident for the first time within two years of the purchase is treated as an Israeli resident for this purpose. It is worth checking in advance how to report and when to file the application.
Will the rates change in 2027?
The temporary provision is in force until 31 December 2026, and the Minister may extend it. See the article on purchase tax on a second apartment.
Not sure the deal is safe? Let's start with a conversation
In an initial conversation we will go over the property, the other party and the payment schedule, and tell you what needs to be checked before you sign.