Buying a home in Israel comes with a cost many olim and foreign buyers only discover late in the process: mas rechisha, the purchase tax. It is paid by the buyer, reported to the Tax Authority shortly after signing, and it is not small change — depending on your status, the same ₪3,000,000 apartment can carry a tax bill of ₪0 or ₪240,000.
How the tax works
Purchase tax is calculated in brackets, like income tax — but the schedule that applies to you depends on who you are: an Israeli resident buying their only home, someone buying an additional property, a non-resident, or a new oleh. The brackets are updated every year according to the CPI; the figures below are current for 2026, and it is always worth confirming the latest numbers before you sign.
Your only home in Israel (Israeli residents)
If you are an Israeli resident and this is your only residential property in Israel, the 2026 schedule is generous:
- Up to ₪1,978,745 — 0%
- ₪1,978,745–2,347,040 — 3.5%
- ₪2,347,040–6,055,070 — 5%
- Higher brackets of 8% and 10% apply only to luxury-priced homes
If you still own your previous home, you can generally keep the single-home rates by committing to sell it within 18 months.
Additional properties and non-resident buyers
Buying an investment property, or buying while you are not an Israeli resident? The schedule is far steeper: 8% from the very first shekel, and 10% above ₪6,055,070. There is no exempt bracket at all. This is the single most common surprise for foreign buyers — the “only home” rates are reserved for Israeli residents, so plan for the 8% schedule and get professional advice on your residency status before you budget.
The oleh benefit — useful, but not always
New olim are entitled to reduced rates for a period around their aliyah (up to seven years after): 0.5% up to ₪2,055,580 and 5% above it, and the benefit can apply even to an additional or investment property. The counterintuitive part: for a first and only home, the regular single-home brackets are often cheaper than the oleh benefit. On a ₪3,000,000 apartment, the regular schedule comes to about ₪45,538 — while the oleh rates come to about ₪57,499. The benefit shines when the property would otherwise be taxed at 8%: there it can save hundreds of thousands of shekels.
Three common mistakes
- Budgeting only for the price. The tax is due early and cannot be rolled into most mortgages — it needs to sit in your cash plan from day one.
- Using the oleh benefit automatically. As the example shows, on a single home it can actually cost more. Compare both routes first.
- Assuming non-residents get the single-home rates. They generally do not — the 8% schedule applies.
Check your number before you sign
The easiest way to see what you would actually pay is to run your own scenario: our free Israeli purchase tax calculator in English lets you enter the price and your buyer status — single home, additional property, or new oleh — and shows the tax instantly, with the updated 2026 brackets. Free, no registration, and it can save you from a six-figure surprise.