Mas Rechisha
Israel's progressive purchase tax (one-time, Land Taxation Law 1963). Resident sole-home buyers pay 0% up to NIS 1,978,745, rising to 10% above NIS 20,183,565. Investors and most foreign buyers pay 8% up to NIS 6,055,070 and 10% above, with no 0% band. Olim get a special 0%/0.5% track up to NIS 6,055,070 on a single home, once per household, under a reform effective Aug. 15, 2024.
Mas Rechisha (Hebrew: מס רכישה, "purchase tax") is Israel's one-time, progressive tax on real-estate acquisition, administered by the Israel Tax Authority under the Land Taxation Law of 1963. What a buyer pays depends almost entirely on buyer status: Israeli residents buying a sole home pay a 0%-to-10% progressive scale, olim receive a special reduced track, and investors, additional-home buyers and most foreign residents pay a flatter 8%-to-10% schedule starting from the first shekel.
What Does an Israeli Resident Pay on a Sole Home?
An Israeli resident buying a single or only home pays 0% on the portion of the price up to NIS 1,978,745, 3.5% on the portion from there to NIS 2,347,040, 5% up to NIS 6,055,070, 8% up to NIS 20,183,565, and 10% above that, with these bands frozen through December 31, 2026 under current published Israel Tax Authority tables. On a NIS 3,000,000 home, that works out to roughly NIS 45,500 in total purchase tax.
What Do Investors and Foreign Buyers Pay?
Anyone buying an additional residential property, and most non-resident foreign buyers by default, pay a flatter schedule with no 0% band: 8% on the portion up to NIS 6,055,070, and 10% above that. On the same NIS 3,000,000 home, an investor or foreign buyer owes roughly NIS 240,000, more than five times the resident rate, illustrating the purchase tax's role as a structural surtax on foreign and investment capital in the Israeli residential market.
What Reduced Rate Do Olim Receive?
Under a reform that took effect August 15, 2024, an oleh buying a single home, in a window running from one year before aliyah to seven years after, pays 0% up to NIS 1,978,745 and just 0.5% on the portion up to NIS 6,055,070, before reverting to the standard resident single-home rates above that threshold, up to a price cap of roughly NIS 20.18 million. The benefit applies once per household to a single qualifying purchase. On the same NIS 3,000,000 home, an oleh pays roughly NIS 5,100, a fraction of what either a resident or an investor would owe.
How Big Is the Gap Between Buyer Categories?
On a NIS 10,000,000 property, a resident buying a sole home owes roughly NIS 514,000 in purchase tax, while a foreign buyer or investor owes roughly NIS 879,000 on the identical property, a gap of more than NIS 365,000 driven entirely by buyer classification rather than the property itself. Buyers must file and pay Mas Rechisha within 60 days of signing the purchase contract.
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