Israel Purchase Tax 2026: Complete Guide for Diaspora and Foreign Buyers

Quick Answer

Foreign buyers and non-resident diaspora Jews pay 8% purchase tax (Mas Rechisha) on the first ₪6,055,070 of any Israeli property purchase in 2026, with higher rates above that threshold. New olim (Jewish immigrants) buying their first home in Israel within 2 years of aliyah pay significantly lower rates — potentially saving ₪100,000-₪200,000 on a typical purchase. Purchase tax must be paid to the Israel Tax Authority within 60 days of signing the purchase contract.

2026 Purchase Tax Brackets

Foreign buyer / non-resident (applies to most diaspora Jews): On the first ₪6,055,070: 8%. Above ₪6,055,070: 10%. Israeli resident — first home: up to ₪1,978,745: 0%. ₪1,978,746-₪2,347,040: 3.5%. ₪2,347,041-₪6,055,070: 5%. Above ₪6,055,070: 8%. Israeli resident — not first home (already owns property in Israel): 8% from the first shekel. Note: these brackets update annually — verify current rates at israeltax.gov.il before signing.

Real Cost Examples

Foreign buyer purchasing ₪3M apartment: 8% × ₪3M = ₪240,000 in purchase tax. Foreign buyer purchasing ₪5M apartment: 8% × ₪5M = ₪400,000 in purchase tax. These are large amounts that must be budgeted explicitly above the purchase price. New oleh purchasing same ₪3M apartment within 2 years of aliyah: oleh rate is significantly lower (confirm exact current rate with your lawyer). Potential saving vs foreign buyer: ₪100,000-₪200,000 depending on property value.

The Oleh Discount — Worth Planning Around

If you are planning to make aliyah and also buy property in Israel, the timing matters enormously. The Mashkanta L'Oleh mortgage benefit and the reduced purchase tax rate are both only available within 2 years of receiving your Teudat Oleh. Using these benefits on a ₪4M purchase could save you ₪150,000-₪250,000 compared to buying as a foreign buyer before or after the window. Many people structure their aliyah timeline specifically to align with a property purchase for this reason.

Frequently Asked Questions

What is Mas Rechisha in Israel?

Mas Rechisha (מס רכישה) is the Israeli purchase tax paid by the buyer when purchasing any property. It is calculated as a percentage of the purchase price and must be paid to the Israel Tax Authority (Rashut HaMiskim) within 60 days of signing the purchase contract. Your Israeli lawyer files the tax declaration and coordinates payment. The rate depends on your residency status and whether this is your first property in Israel.

How much is purchase tax in Israel for a foreign buyer in 2026?

Foreign buyers and non-resident diaspora Jews pay 8% purchase tax on the first ₪6,055,070 of the property value, and higher rates above that threshold. On a ₪4M apartment, purchase tax is ₪320,000. This is on top of the purchase price and must be paid within 60 days of contract signing. Always confirm the current rates with your lawyer before signing as brackets update annually.

Do new olim get a purchase tax discount in Israel?

Yes — significantly. New olim (Jewish immigrants with Teudat Oleh) buying their first home in Israel within 2 years of aliyah pay reduced purchase tax rates that are substantially lower than the 8% foreign buyer rate. The exact oleh rate changes periodically — confirm the current rate with your Israeli lawyer. On a ₪4M purchase, the saving can be ₪150,000-₪250,000 compared to the foreign buyer rate, making this one of the most valuable financial benefits of oleh status.

When does purchase tax need to be paid in Israel?

Purchase tax must be paid to the Israel Tax Authority within 60 days of signing the purchase contract. Your Israeli lawyer files the Mas Rechisha declaration and coordinates the payment. Late payment results in significant interest charges and penalties. You will need your Israeli bank account set up before the 60-day deadline — this is another reason to open your Israeli bank account as early as possible in the buying process.