What real estate-related benefits do Olim Chadashim receive upon making Aliyah?
Israel provides various benefits and incentives for Olim Chadashim (new immigrants) to help simplify the transition to life in Israel and make homeownership more attainable. Here’s a detailed overview of these benefits, including their eligibility periods:
1. Purchase Tax Discount (Mas Rechisha)
As a new immigrant, you are eligible for a significant reduction in Purchase Tax when buying your first home in Israel. The calculation of the purchase tax is based on specific tiers, and for Olim Chadashim making Aliyah after August 15, 2024, the following rates apply:
- First Tier: No tax is charged on the first ₪1,978,745 of the property’s value (as per 2024 rates).
- Second Tier: A 0.5% tax applies to the portion of the property’s value between ₪1,978,745 and ₪6,000,000.
- Third Tier: For any amount above ₪6,000,000, the standard tax rates apply, as they do for all Israelis.
This benefit is available for up to seven years after making Aliyah and can also be applied retroactively to a property purchased up to one year before your Aliyah date. The discount can only be used once for a residential property and once for a business property. It is intended for residential purposes and does not apply to investment properties.
If you purchase new construction before making Aliyah, you may benefit from an extended eligibility period for the tax discount. In this case, the eligibility period begins when you sign the purchase agreement and extends until 12 months after receiving the Tofes 4 (Certificate of Occupancy) or three years from the contract date, whichever comes first.
Use the Buyitinisrael “Mas Rechisha Purchase Tax Calculator”
2. Mortgage Track
As a new Oleh, you may qualify for a Government loan of up to several hundred thousand shekels, repayable at a fixed interest rate of 3% over 20–25 years. Although the principal is linked to inflation, there is no pre-payment penalty, giving you the flexibility to pay off the loan early. This benefit, available during your first 15 years in Israel, is issued through Israeli mortgage banks.
The loan is only available if you do not own property in Israel. Your eligibility and the loan amount are determined by a scoring system that considers your age, marital status, and years of residence in Israel. This option could be particularly advantageous if inflation-linked mortgage rates exceed 3%. However, being an inflation-linked loan, you may want to consider the potential fluctuations in the total loan amount.
2. Rental Assistance
As an Oleh Chadash, you are entitled to rental assistance from the Israeli Government. This assistance begins in the seventh or eighth month after your Aliyah, depending on your date of arrival, and gradually decreases over time:
- Months 1–12: You will receive the highest level of assistance.
- Months 13–24: The subsidy decreases slightly.
- Months 25–48 (or 60): A smaller, fixed amount is provided for the remainder of your eligibility period.
This benefit is available for up to four or five years, depending on your Aliyah date. The amount you receive will be determined based on your family status and the years you have resided in Israel. Higher subsidies may also be available if you rent in development towns or peripheral areas designated as national priority zones.
If you are entitled to the Absorption Basket (Sal Klita), your rental assistance will be deposited directly into your bank account starting the seventh month after your Aliyah. If you are not entitled to the Absorption Basket, you can apply for rental assistance through one of the housing assistance registration companies.
For more information about these benefits, visit Nefesh B’Nefesh.
This guide is intended to provide the reader with general information and not to serve as legal or other professional advice. Readers are advised to obtain advice from qualified professionals before entering into any real estate transaction.
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