Purchase Tax 2026: How Much You Pay and When

What is Purchase Tax and Who Pays It

Purchase tax is a tax that the buyer pays to the state when acquiring rights in real property: an apartment, land, office, shop, or a share in them. The tax is determined according to the transaction value, the type of property, and the buyer's status, not according to his income or the amount he finances from the bank. Sometimes, a buyer who signs a contract without calculating the tax discovers after signing that the amount differs from what he assumed when planning the transaction. Therefore, it is worthwhile to calculate before signing, while it is still possible to change the contract wording, the registration structure, and the timeline.

The obligation falls on the buyer. Capital gains tax, if any, falls on the seller. The parties can agree in the contract on who bears certain costs, but towards the tax authority, the person liable for reporting and payment is the buyer. If the tax is not paid, the authority approaches the buyer, not the seller, and the debt is registered in his name.

On What the Tax is Calculated

The tax is calculated on the transaction value. Usually this is the price agreed upon in the contract, but the authority is entitled to check whether the reported price reflects the property's value. Reporting a price different from the actual price exposes both parties to proceedings, and we do not recommend it. If the contract includes additional payments that are part of the consideration, such as work the buyer has undertaken to perform or liabilities he assumes, it is advisable to check whether they are included in the value.

The Main Tracks

The classification of the transaction determines which table is used for calculation. This page describes the main tracks:

• Primary residence for an individual Israeli resident, with progressive tax brackets.
• Non-primary residence, according to a temporary provision valid until the end of 2026.
• Right that is not a primary residence, such as land, office, or shop.
• New immigrant purchasing a primary residence, according to regulation 12a.

The data on this page is based on the Land Tax Enforcement Directive 1/2026. The directive applies to transactions from 16.1.2025 onwards, and in some tracks for limited periods. Whoever purchases during a different period, or whose transaction was signed before these dates, should check which rates apply to them.

Transaction Stages and Tax Points at Each Stage

Purchase tax is not a single event that occurs on a specific day. It accompanies the transaction from negotiation through registration, and at each stage there is a different question worth clarifying:

1. Before the contract. Check the land registry document and the buyer's status, decide which classification is expected, and calculate the tax so it is clear how much money needs to be set aside beyond the apartment price.
2. Upon signing the contract. This is when the transaction date is set, and usually from then the countdown to filing and payment begins. The contract wording also determines who is responsible for handling the filing.
3. After signing. File a return with the tax authority, receive an assessment or calculate self-assessment, and pay within the deadline.
4. Before registration. Present proof of tax payment or exemption, and without this proof the land registry registration stalls.
5. After registration. Keep all documents, as the authority is entitled to review the classification even after the transaction is completed.

Whoever is familiar with this sequence is not surprised at a late stage. He knows in advance that the tax is part of the acquisition cost, that it has deadlines, and that it is a condition for registration. Buyers who treat purchase tax as a technical detail to be handled at the end may find themselves needing to raise a large sum in a short time, without knowing whether the classification they assumed is correct.

Why It's Worth Consulting Before Signing

Most purchase tax errors are not calculation errors. They are classification errors. A buyer who was certain the apartment is a primary residence discovers he has a share in an inherited property, or that his spouse is registered as an owner of another apartment. Another buyer assumes that the new immigrant benefit applies to him and does not check whether the transaction falls within the time window. In both cases, the difference between the classifications can be substantial, and it is discovered at a stage when it is difficult to correct.

An attorney who reviews the transaction before signing goes through the land registry document of the apartment, the contract, the buyer's details, and the properties registered in their name, and explains which classification is expected and what should be written in the filing. The first consultation meeting at our office is at no cost. You can contact us through the contact page or by phone 052-358-5915.

Single Residential Unit: Property Purchase Tax Brackets in 2026

A person purchasing a single residential unit is eligible for preferential tax brackets. This track applies to an individual resident of Israel purchasing a property that will be his or her sole residential dwelling, for transactions from January 16, 2025 through January 15, 2028. The following table is based on Real Estate Taxation Enforcement Directive 1/2026.

The tax is progressive. Each rate applies only to the portion of the price within that bracket, not to the entire price. A purchaser whose property price exceeds a bracket threshold does not pay the higher rate on the full amount, but only on the excess above the threshold.

Example: Single Residential Unit Priced at ₪2,500,000

We calculate the tax on a single residential unit with a transaction value of ₪2,500,000:

1. On the portion up to ₪1,978,745, the tax is 0.
2. On the portion between ₪1,978,745 and ₪2,347,040, that is on ₪368,295, the tax is 3.5%, which equals ₪12,890.
3. On the portion above ₪2,347,040, that is on ₪152,960, the tax is 5%, which equals ₪7,648.

Total approximately ₪20,538. We wrote "approximately" because in the official calculation there is rounding of agorot. This is an example for understanding only, and an actual assessment is determined according to the actual transaction data.

How to Calculate Progressive Tax at Any Price

The example above applies to one price. To calculate at a different price, work through the table from top to bottom and follow the same procedure:

1. Determine which bracket the property price falls into. All brackets below it are fully occupied, and the bracket in which the price falls is only partially filled.
2. For the full brackets, calculate the difference between the upper threshold and lower threshold and multiply by the rate of that bracket.
3. For the partial bracket, calculate the difference between the price and its lower threshold and multiply by its rate.
4. Add the amounts together. The result is the estimated tax, without rounding of agorot.

A purchaser whose property price falls in the 0% bracket pays no purchase tax at all. A purchaser whose price exceeds the first threshold pays tax only on the excess. For a more expensive property, the higher rates apply only to the upper portion of the price, and therefore the effective tax rate, meaning the tax divided by the price, is lower than the rate in the final bracket the price reaches.

New Construction and Second-Hand Property

The brackets are identical for new construction and second-hand properties. The difference lies in what is included in the transaction value and in the timing. In new construction, consideration is paid in installments according to a schedule, and sometimes the contract includes indexation or additions that require examination as to how they affect the reported value. In second-hand property, the data are generally simpler, but an examination of the property status in the registry is required, including liens and notes. In both cases, the transaction date is the point of reference, not the delivery date or registration date.

A Single Residential Unit Is Not a "First-Time Purchase"

The most common confusion is between a single residential unit and a first-time purchase. The law does not ask whether this is the first property you have purchased in your lifetime. The question is whether at the time of purchase you own another residential dwelling. A person who sold a property in the past and does not own another dwelling may be considered a single-unit owner, while a person who purchased a property in the past and continues to hold it probably cannot be considered as such.

Several circumstances may change the classification, and therefore they should be verified before signing:

• Spouse's property. A property registered in a spouse's name may be considered for purposes of this examination.
• Share in an inheritance. Ownership of a share in a property received through inheritance may change the classification. The test depends on the size of the share and the circumstances, and should not rely on a general rule.
• Property received as a gift. A property received as a gift may be considered as property owned by the purchaser.
• Joint purchasers. When several persons purchase together, the classification is checked for each of them, and one person's ownership of another property may alter the picture.

What to Verify Before Assuming the Property Is a Single Unit

The examination begins with a current property title extract for every property registered in the names of the purchasers, and in the case of marriage, also in the name of the spouse. If there is a share in an inheritance or a property received as a gift, documents proving exactly what was received and when are requested. If there is an outstanding sale transaction, it is examined at what stage it is and what it states regarding the delivery date and transfer of ownership.

The examination should be done before a deposit is paid, not after. A deposit paid based on an incorrect assumption regarding the classification is difficult to recover, and a contract already signed is binding. When the classification is unclear, it is possible to include terms in the contract that protect the purchaser, such as a condition precedent linked to clarification with the authority.

Additional Apartment, Commercial Property, Land and Returning Residents

Residential Apartment That Is Not a Primary Residence

A person who is already an owner of a residential apartment and purchases an additional apartment pays according to a different rate table. Pursuant to a temporary provision effective until 31.12.2026, and applicable from 16.1.2025, the rates are:

Here too the tax is graduated, and the 10% rate applies only to the portion above ₪6,055,070. Example: an additional apartment with a transaction value of ₪2,500,000 is subject to 8% of the amount, meaning ₪200,000.

Please note: The 8% rate for an additional apartment is a temporary provision until the end of 2026. This should not be interpreted to mean it will remain in 2027. A person whose transaction carries over to the next year should check what legislation is in effect at that time, and should not assume that the current table will apply.

To understand why classification is important: at the same price of ₪2,500,000, a primary residence is subject to approximately ₪20,538 and an additional apartment to ₪200,000. This difference is the reason the classification is reviewed before signing and not after.

Right That Is Not a Residential Apartment

Land, office space and a store are not residential apartments. As a rule, the purchase tax on them is 6% of the transaction value. For a plot designated for building a residential apartment, it is possible, subject to conditions, to receive a refund of one-sixth, so the effective tax will be 5%.

Returning Resident: Regulation 12a

A returning resident who purchases a primary residential apartment during the period up to 15.1.2028 is entitled to reduced rates pursuant to Regulation 12a:

The reduction applies within a time window that begins before the return and ends seven years after it. We do not detail here the boundaries of the window. A person purchasing near the edge of the window should verify the dates against their documents, and should not rely on estimation.

Home Improvers

A person purchasing a new apartment before selling the previous one and wishing to enjoy the primary residence pathway should determine within what period they must sell the previous apartment. There is no universal rule that applies to everyone. The period depends on the date of purchase, on purchase from a developer versus a second-hand purchase, and on legislative extensions that have been determined over the years.

A person planning to purchase before selling should clarify in advance what period applies to their transaction, and should take into account a contingency agreement if the sale of the old apartment is delayed. A sale that is delayed beyond the period can change the tax the buyer is liable for.

Why Not to Rely on Rules of Thumb

In conversations about apartment purchases, rules of thumb are heard: that young couples do not pay tax, that home improvers pay a lot, that returning residents are exempt. Some of these rules are correct under certain circumstances and some are partially correct, and this changes with each implementation regulation. Purchase tax is an area where a single date, or one half of a property, can change the table. Therefore, the safe approach is to rely on the table that applies on the date of the transaction, and on the classification you have verified according to your documents.

Cases Where Classification Is Not Clear

Not every transaction fits comfortably into one of the pathways. Several recurring situations require separate review:

• A buyer planning to sell another apartment. He is not a primary resident at the time of purchase, but it is possible that the law allows him to be treated as such if he sells within a period. The conditions and duration of the period depend on the circumstances, and therefore cannot be determined without seeing the transaction.
• A property with mixed use. When a property has a residential portion and another use portion, you must check how each part is classified. We do not detail here the rules for division.
• Land with a building on it. Sometimes what is purchased is a right in land and not a completed apartment, and the classification affects the rate.
• Purchase of a portion of a property. A purchase of an undivided portion in an apartment or land is also a purchase of a right in real estate, and the tax is calculated on the portion purchased.

In all these situations the rule is the same: verify the classification before signing, document its basis, and prepare a declaration that matches the actual facts. A declaration based on a classification that is not accurate may result in an additional assessment, and therefore it is preferable to verify before filing.

Comparison Between the Pathways

The table is a summary only. Each pathway is subject to conditions that do not appear in it, and therefore it should not be relied upon in place of a review of the transaction itself.

When to Declare, When to Pay, and What to Check Before Signing

Declaration and Payment

The buyer must file a declaration of the transaction with the tax authority. Generally, the declaration is filed within 30 days from the transaction date. Payment based on self-assessment is usually made within 60 days. These are general rules, and there are situations where the deadlines differ, so it is advisable to verify them against the transaction details.

The transaction date is not the registration date at the Land Registry. The transaction date is determined by the contract and its terms, and it may be long before the rights are registered in the buyer's name. A buyer who waits for registration to begin counting days may miss the deadline, so counting begins from the transaction date.

Without approval of tax payment or exemption from it, rights cannot be registered at the Land Registry. For details about this approval and what happens when it is missing, you can read the page Property Transfer Tax Payment Approval Before Land Registry Registration.

Between Signing and Registration

Time passes between the signing of the contract and the registration of the rights in the buyer's name. During this period, the buyer wants to protect his right against double sale, attachment, or new encumbrance. One of the tools for this is registering a notice of caveat at the Land Registry. Such a notice is not a substitute for property transfer tax payment, and it is registered alongside the declaration, not in its place.

Checklist Before Signing

1. Determine the transaction classification: single residential unit, additional residential unit, right that is not a residential unit, or newcomer (oleh).
2. Obtain an updated Land Registry extract for the property and any other property registered in the buyers' names.
3. Check if there is a spouse, inheritance share, or gifted apartment that may change the classification.
4. Verify that the transaction date falls within the period during which the chosen track applies.
5. Calculate the tax in advance and include it in the transaction's financing plan.
6. Specify in the contract who is responsible for filing the declaration and payment, and when.
7. Keep all documents: contract, extracts, evidence of inheritance or gift, and proof of payment.

What to Include in the Contract

A good property purchase contract explicitly addresses property transfer tax and does not leave it to interpretation. It is advisable to specify that the buyer is responsible for tax payment, and that the seller is committed to providing the documents necessary for the declaration, such as extracts, approvals, and property details. If the buyer's classification depends on a future event, such as the sale of another apartment, this can be written in the contract and define what happens if the event is delayed. When the contract is silent, each party interprets the silence in its favor, and the dispute emerges precisely when the payment deadline approaches.

Another overlooked point: buyers pay the tax, but the seller is the one holding some of the documents. An old Land Registry extract, encumbrance clearances, and property details are not always in the buyer's possession. A contract that obliges the seller to cooperate saves weeks of follow-ups.

What to Bring to the Meeting with the Lawyer

• The contract, or its draft if not yet signed.
• Land Registry extract for the property, and extracts for other properties registered in the buyers' names.
• Details about the spouse and properties registered in his/her name.
• Inheritance or gift documents, if there is a property share acquired that way.
• If the buyer is a newcomer (oleh), documents evidencing the date of immigration.
• If the buyer is upgrading housing, details about the apartment not yet sold.

With these documents, a focused answer can be provided regarding the expected classification and the dates for declaration and payment, and issues in the contract that should be changed before signing can be identified.

Common Mistakes

In the transactions we see, several mistakes recur, and all of them are preventable:

• Assuming that a single residential unit means a first apartment, without checking for spouse, inheritance, or gift.
• Counting the days for declaration from the Land Registry registration date rather than from the transaction date.
• Relying on an old table or a figure heard from a friend, without checking the current implementation instructions.
• Assuming the rate for an additional residential unit is fixed, despite it being a temporary provision.
• Signing a contract without reserving a sum for tax, and then facing a cash shortage as the deadline approaches.
• Failing to keep documents that establish the classification, making it difficult to prove if the authority inquires.

Delay and Dispute with the Authority

A declaration filed late or payment made late may incur late fees. If the authority issued an assessment you do not agree with, there are objection and appeal procedures, and they also have deadlines that are important to observe. Therefore, when a letter or assessment is received from the authority, it should not be left unanswered, and a lawyer should be contacted immediately. A lawyer checks whether the assessment is based on the correct classification, whether the data in it is accurate, and whether there is grounds for filing an objection.

Official Calculator

The state's official simulator is available on the gov.il website. It is suitable for an initial check, but it assumes the data entered is correct. It does not check whether the apartment is actually single and does not ask about inheritance, gift, or a spouse's property. Final calculation is done only by the tax authority.

How We Work

Mandelboyms, Gor, Witzman-Gor & Co. has been operating in Ramat Gan since 2008, located at Donash Street 1. We guide buyers and sellers in real estate transactions, including classification verification, preparation of the tax return, and assistance with land registry registration. At the initial consultation, which is free of charge, we review the contract and documents and explain what procedure is expected to apply. A meeting can be scheduled through our contact page or by phone at 052-358-5915.

Disclaimer

Disclaimer: The information on this page is a general explanation current as of November 2026. It is not an assessment and is not advice for a specific case. Final calculation is performed only by the tax authority, and rates and conditions may change by legislation and enforcement directives.