State revenues from real estate taxes in January 2025 amounted to approximately 1.7 billion shekels, with purchase tax revenues rising by 46%. The trapped profits tax reform led to increased dividend withdrawals, resulting in record tax revenues of 62.5 billion shekels in January.
By Doron Breutman, Nadlan Center
The net state revenue from real estate taxation totaled approximately 1.7 billion shekels in January 2025, according to data published today (Monday) by the Ministry of Finance. This represents a 30% increase compared to January 2024. Revenues from capital gains tax rose by 18%, while revenues from purchase tax increased by 46%.
Unlike most months, when real estate taxation contributes significantly to total tax revenues, it accounted for less than 2% in January of the previous year. However, in January 2025, total state tax revenues soared to 62.5 billion shekels. This marks a record for monthly tax revenues, likely due to several legislative changes that influenced the behavior of the business sector and consumers at the end of 2024.
At the top of the list is the trapped profits tax reform, which led to increased dividend withdrawals by business owners, generating billions in tax revenue for the state. Additionally, implementing a new 2% surtax on capital-derived income and the VAT increase from 17% to 18% contributed to the rise.
In real terms, tax revenues increased by 21% compared to January 2024. Direct tax collection rose by 25%, indirect tax collection by 16%, and revenue from fees increased by 24% compared to last year.
