Purchase Tax Update: New thresholds in January 2022

Every year, during the month of January, Israel Tax Authority publishes new thresholds for Mas Rechisha (Purchase Tax in Israel) according to the Central Bureau of Statistics Home Prices Index for the previous year.

The Mas Rechisha or Purchase Tax 2022 thresholds are updated annually, in mid-January, with consideration for the Home Prices Index of the previous year (published by the Central Bureau of Statistics). This generally translates into slightly lower taxes for home-buyers. In November, as a result of the ongoing housing crisis and a sharp rise in real estate prices in Israel last year, the Purchase Tax rates for investors (second-home buyers) including foreign residents were increased. The updated levels this year are in line with that move and continue to reflect an increased rate for investors, including foreign residents, purchasing real estate in Israel.

Click here to use our Mas Rechisha Purchase Tax Calculator in English.

As of 16/01/2022, the new levels are as follows*:

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Single Residential Home

Applicable when the property purchased is the only residential property owned in Israel. 

Up to NIS 1,805,545 of the purchase price0%
NIS 1,805,545 – NIS 2,141,605 of the purchase price3.5%
NIS 2,141,605 – NIS 5,525,070  of the purchase price5%
NIS 5,525,070 – NIS 18,416,900 of the purchase price8%
NIS 18,416,900 and above10%

Additional Residential Home

Applicable when the individual owns more than one residential property in Israel. [Foreign-residents pay mas rechisha at the same rate as Israeli residents who own more than one home in Israel.]

Up to NIS 5,525,070 of the purchase price8%
NIS 5,525,070 and above10%

New Olim

Applicable to one residential property purchased by new Olim within the first seven years of making Aliya.  

Up to NIS 1,902,945 of the purchase price 0.5%
NIS 1,902,945 and above 5%

*Rates applicable from 16/01/2022 until 15/01/2023.

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The contents of this article are designed to provide the reader with general information and not to serve as legal or other professional advice for a particular transaction. Readers are advised to obtain advice from qualified professionals prior to entering into any transaction.

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