Purchase Tax Update: November 2021

As a result of the ongoing housing crisis and a sharp rise in real estate prices in Israel this year, the Purchase Tax rates for investors (second-home buyers) including foreign residents have been increased. The hope is that purchases made by investors will slow down and make it somewhat easier for homebuyers in Israel to enter the market.

The Mas Rechisha or Purchase Tax thresholds are generally updated annually, in mid-January, with consideration for the Home Prices Index of the previous year (published by the Central Bureau of Statistics). This usually translates into slightly lower taxes for home-buyers. In July 2021, the Finance Ministry announced a cut in purchase tax to encourage investment activity in the local real estate market during the Corona crisis. However, since then, real estate prices have risen sharply and the housing crisis in Israel has become an even bigger issue. This has prompted the government to revert back to higher purchase tax rates for investors, including foreign residents, purchasing real estate in Israel.

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

As of 28/11/2021, the new levels are as follows*:


Single Residential Home

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

Up to 1,747,865 NIS of the purchase price0%
1,747,865 – 2,073,190 NIS of the purchase price3.5%
2,073,190 – 5,348,565 NIS of the purchase price5%
5,348,565 – 17,828,555 NIS of the purchase price8%
17,828,555 NIS 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 5,348,565 NIS of the purchase price8%
5,348,565 and above10%

Applicable to new Olim within the first seven years of making Aliya.  

Up to 1,842,155 NIS of the purchase price 0.5%
1,842,155 NIS and above 5%

*Rates applicable from 28/11/2021 until 15/01/2022.

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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