Buying Property in Israel: What Taxes Should You Expect in 2025?

Buying real estate in Israel remains an attractive move for investors, new immigrants (olim hadashim), and families worldwide. But before you sign a contract, it’s essential to understand the real estate taxes that could significantly affect the total cost.

1. Mas Rehisha (מס רכישה) – Purchase Tax

This tax is paid by the buyer and is calculated based on:

• Buyer’s status: Israeli resident, foreign investor, or new immigrant.
• Use of the property: primary residence or investment.
• Property value.

In 2025, the brackets may change, but generally:

• Primary residence: partial exemption up to around 1.9M₪.
• Investment property: tax ranges from 8% to 10%.
• New immigrants: reduced rates (if bought within 7 years after aliyah).

2. Mas Shevach (מס שבח) – Capital Gains Tax

This is paid when selling the property. It’s calculated on the profit made between purchase and resale (minus renovation and legal costs). The standard rate is 25%.

Exemptions may apply:

• If the property was your main residence for at least 18 months.
• For olim under specific conditions.

3. Additional Costs to Consider

• Lawyer or notary fees: 0.5% to 1.5%.
• Agent commission: 1% to 2%.
• Bank fees if using a mortgage.

4. Practical Tips

• Work with a lawyer specialized in Israeli real estate.
• Learn about new immigrant tax benefits.
• Ask for a complete tax simulation before committing.