Purchase tax in 2026: Who is eligible for an exemption or discount?

1. What is sales tax and why is it important??

Purchase tax is a tax imposed on the acquisition of rights to real estate in Israel, and is anchored בחוק מיסוי מקרקעין (שבח ורכישה), התשכ”ג-1963. The tax is paid to the Israel Land Administration or the Land Registrar when registering the transaction.

1.1 The legal basis for purchase tax

The law states that all Purchaser of rights in real estate Must pay purchase tax, unless he is entitled to an exemption or discount under the law. The tax is calculated based on the value of the apartment or the transaction fee, whichever is higher.

Section 9 of the Real Estate Taxation Law states:: “שיעור המס בעד רכישת זכות במקרקעין שאינם זכויות במקרקעין שמשתלם עליהם מס רכישה מופחת, יהיה בשיעור כמפורט בתוספת השלישית”.

1.2 When do you pay the tax??

The purchase tax must be paid. Within 50 days from the date of signing the contract or from the date of receipt of possession of the property, whichever comes first. Failure to pay on time may result in fines and interest.

2. Purchase tax rates in 2026: Detailed tables

Purchase tax rates in 2026 vary depending on the type of apartment (first or second), the status of the buyer, and the value of the property. Below is the full breakdown.:

2.1 Purchase tax table – Single apartment (eligible buyers)

Important notes:

• The amounts are updated as of 2026 and are linked to the Consumer Price Index.
• The tax calculation is gradual – Each level is taxed separately
• For exact details, please refer to בTax Authority website
• Purchase Tax Simulator – Tax Authority: Tax Authority – Purchase Tax Simulator

2.2 Purchase tax table – Additional apartment (second or higher)

Example calculation for a second apartment:

• Apartment worth 2,500,000 ₪
• Purchase tax: 2,500,000 × 8% = 200,000 ₪
• Compared to a first apartment that would have cost only 31,700 NIS

2.3 Special table – Rights for new immigrants and returning residents

Eligibility conditions for immigrants:

• Buying a single apartment in Israel
• The apartment will not be sold within 4 years.
• The buyer did not own an apartment in the 18 months prior to the immigration.

2.4 Reduced tax table for the disabled – Regulation 11 of the Real Estate Taxation Regulations

according to תקנה 11 לתקנות מיסוי מקרקעין (שבח, רכישה ומכירה), התשל”ב-1972, Certain disabled people are eligible for a reduced purchase tax of 0.5% only.

Important clarifications regarding the disabled:

1. For residential use only – The discount is only given for the apartment. For the disabled person's own residence, and not for an apartment for investment or rental
2. Also in a second apartment – Unlike regular buyers, an eligible disabled person can benefit from the reduced tax of 0.5% Also about a second apartment, as long as it is residential
3. Certificate from the National Insurance Institute – Valid confirmation of the degree of disability and lack of income is required.
4. נכי צה”ל – כל נכה צה”ל מ-19% ומעלה זכאי, ללא קשר לדרגת אי-השתכרות

Practical example:

• A disabled person with a non-earning status of 80% purchases a second apartment worth 2,500,000 NIS To his residence
• Instead of paying 8% (200,000 NIS), he will only pay 0.5%
• Purchase tax: 12,500 NIS
• Savings: 187,500 ₪!

3. Eligibility for exemption from purchase tax: Who is eligible and under what conditions??

Purchase tax exemption It is a significant benefit that can save tens of thousands of shekels. However, eligibility is subject to strict conditions.

3.1 The cumulative conditions for full exemption

according to Section 9(b) of the Real Estate Taxation Law, A purchaser is entitled to a full exemption if all The following conditions are met:

1. Single apartment – הרוכש ובן/בת זוגו אינם בעלים של דירה נוספת בישראל או בחו”ל
2. Residential only – The apartment is intended for residence and not for business or rental.
3. Period of occupation – The buyer committed to living in the apartment for 4 years
4. Value below threshold – The value of the apartment does not exceed 1,980,775 NIS (as of 2026)
5. Staying between apartments – Has not owned an apartment in the last 18 months

3.2 החריג של “הדירה הקודמת”

אחד המכשולים המשפטיים המורכבים הוא הגדרת “דירה יחידה”. 

The Real Estate Taxation Law stipulates Section 49C(1) קובע מכירת דירה קודמת בפחות מ-18 חודשים (ובמקרים מסוימים 24 חודשים) מרכישת דירה חדשה מאפשרת למשפרי דיור להיחשב כבעלי “דירה יחידה” לצורכי מס, וכך לקבל פטור ממס שבח וליהנות ממדרגות מס רכישה מופחתות על הדירה החדשה.

Difference between 18 and 24 months: For apartments purchased from June 1, 2025, the period returned to 24 months, but those who purchased between June 1, 2023 and May 31, 2025 are required to sell within only 18 months. 

3.3 Single apartment – Definition and extensions

מהי “דירה יחידה” לעניין החוק?

The ruling determined that ownership is tested on the day Signing the contract, and not on the day the rights are registered in the Land Registry. This ruling is especially important for those who are selling an apartment and purchasing a new one in the near future.

Special situations:

• inheritance – בעלות על דירה בירושה נספרת לעניין “דירה יחידה”
• partnership – Co-ownership of an additional apartment negates exemption
• Spouse – Even if the apartment is registered in only one name, the ownership of the other has an impact.

4. Purchase tax discounts: When are you eligible for reduced tax??

Even if you are not eligible for a full exemption, you may be eligible for significant discounts.

4.1 Discount for the buyer of a single apartment

A single-family home buyer who meets all the conditions except Terms of Value (i.e., the apartment costs more than 1,980,775 NIS), is entitled to a discount according to the graduated calculation detailed in the table above.

Detailed calculation example:

Let's say you purchase an apartment worth 3,200,000 NIS as a single apartment:

Level 1: Up to 1,980,775 ₪ → 0% = 0 ₪ Level 2: 1,980,776-2,137,585 ₪ (156,810 ₪) → 3.5% = 5,488 ₪ Level 3: 2,137,586-3,200,000 ₪ (1,062,415 ₪) → 5% = 53,121 ₪ Total purchase tax: 58,609 ₪

On the other hand, if you were to purchase the same apartment asSecond apartment:

3,200,000 ₪ × 8% = 256,000 ₪ (!!) A savings of almost 200,000 ₪!

4.2 Special discount for young couples

Although purchase tax benefits for young couples have been eliminated in recent years, indirect relief still exists:

• Purchase grant – Couples who meet certain conditions may be eligible for grants through the Ministry of Housing
• Subsidized mortgage – Low-interest loans through banks
• It is recommended to check eligibility. בMinistry of Construction and Housing website

5. Special rights for unique populations

5.1 New immigrants and returning residents

New immigrants and returning residents enjoy significant purchase tax benefits, as part of the government's policy to encourage immigration.

Full rights:

1. Reduced tax rate – Only 0.5% for a single apartment (compared to up to 10% for an ordinary citizen)
2. Eligibility period – Until 7 years From the day of immigrating to Israel
3. No value limit – The discount applies to the entire value of the apartment.

The conditions:

• The apartment is an apartment. unit Only (does not own another apartment)
• Commitment to occupy the apartment for a period of 4 years at least
• Failure to sell the apartment within 4 years (except in special cases)

according to חוזר מס הכנסה מס’ 1/2011, An immigrant who purchased an apartment and was forced to sell it within 4 years due to difficult financial circumstances may request an exemption from the tax refund.

5.2 Disabled – Reduced tax according to Regulation 11

according to תקנה 11 לתקנות מיסוי מקרקעין (שבח, רכישה ומכירה), התשל”ב-1972, Disabled people in certain categories are entitled to a reduced purchase tax of 0.5% only.

Who is eligible for a reduced tax of 0.5%??

1. Disabled with no earnings over 75% – A disabled person who receives a non-earnings allowance from the National Insurance Institute at a rate exceeding 75%
2. נכה צה”ל מ-19% ומעלה – כל נכה צה”ל שאחוז נכותו הוא 19% ומעלה

Critical conditions for the benefit:

⚠️ For residential use only – The discount is given only For the apartment For the disabled person's personal residence, and not for an apartment for investment, rental, or any other commercial purpose.

✅ Also in a second apartment – Unlike regular buyers, an eligible disabled person can benefit from the reduced tax of 0.5% Also about a second apartment, as long as the apartment is used for his personal residence.

Practical examples:

Example 1 – Disabled with no earnings 80%:

• Buying an apartment First Worth 3,000,000 NIS for his residence
• Purchase tax: 3,000,000 × 0.5% = 15,000 ₪
• Compared to a regular buyer who would pay approximately 48,578 NIS
• Savings: 33,578 ₪

Example 2 – נכה צה”ל 50%:

• Buying an apartment Second Worth 2,000,000 NIS for his residence (selling the first apartment)
• Purchase tax: 2,000,000 × 0.5% = 10,000 ₪
• Compared to a regular buyer of a second apartment who would pay: 160,000 NIS
• Huge savings: 150,000 NIS!

Example 3 – Purchase for investment (not for residence):

• נכה צה”ל 30% רוכש דירה להשכרה
• ❌ No eligibility For reduced tax
• Will pay regular purchase tax (8% on a second apartment)

Required documents:

1. Disability certificate – Valid confirmation from the National Insurance Institute regarding the degree of disability.
2. Certificate of non-earnings – For those who need it (normal disability above 75%)
3. deposition – A detailed affidavit that the apartment is intended for the disabled person’s personal residence.
4. Approval of the tax administrator – An application must be submitted in advance for approval of the discount.

Important tips for the disabled:

💡 Plan ahead. – Submit the application for reduced tax before Signing the contract to avoid problems

💡 Maintain the residential zoning – Do not rent or use the apartment for business purposes.

💡 Registration in the name of a spouse – The apartment can be registered in the name of your spouse, and the discount will be maintained.

💡 Also in a second apartment – Don't give up your eligibility even if you have an existing apartment.

5.3 Families with many children

Although there is no specific purchase tax discount for families with multiple children, there are indirect benefits:

• Subsidized loans – Favorable mortgage terms for families with 4+ children
• Assistance from the Ministry of Housing – Various assistance programs
• Exemption from municipal taxes – In some authorities

6. Transfer of an apartment without compensation between family members

Moving an apartment between family members is a sensitive and complex issue from a legal and tax perspective.

6.1 מהי “העברה ללא תמורה”?

A transfer without consideration is a transfer of ownership of an apartment. Free of charge money, usually as a gift. According to the law, such a transaction is also subject to purchase tax.

6.2 The legal framework

Section 48A1(c) of the Real Estate Taxation Law states that Free transfer between relatives May be exempt from purchase tax, under the following conditions:

Close to the law:

• spouse
• Parent/Child
• Parents of parents
• Brothers

Conditions for exemption:

1. Family closeness Proven in official documents
2. There is no financial return. – No money was paid, no other asset was transferred, and no debt was offset.
3. Statement in an affidavit – Both parties declare to a lawyer that the transfer is a gift
4. Approval from the Tax Authority – Prior approval is required.

6.3 “Hidden reward” – The legal trap

אחד הנושאים המשפטיים המורכבים ביותר הוא “תמורה סמויה”. בית המשפט נדרש לא אחת להכריע האם עסקה שהוצגה כמתנה, היא למעשה מכר.

In the ruling נקבע כי העברת דירה מהורה לבן “ללא תמורה”, כאשר הבן שילם בפועל את יתרת המשכנתא של ההורה, נחשבת לsale And not a gift, and therefore subject to full purchase tax.

warning: Also indirect payment, such as:

• Payment of the transferor's debts
• Providing value for money services
• “הבנות” משפחתיות כלכליות

עלול להיחשב “תמורה” ולשלול את הפטור.

Pro tip: At the Halevi Law Firm in Jerusalem, we recommend planning intergenerational asset transfers in advance, to minimize overall tax liability.

7. Practical tips for saving on purchase tax

After we have reviewed all the theoretical aspects, it is time for practical implementation.

7.1 Timing the transaction – very important!

Tip 1: Sold a previous apartment before purchasing

If you have an existing apartment, sell it. At least 18 months Before purchasing the new apartment to maintain eligibility for the exemption/discount as a purchaser of a single apartment.

Tip 2: Coordination between spouses

If one spouse owned an apartment before the marriage and a financial agreement was made between the spouses, consider registering the new apartment only in the name of the other spouse (under certain conditions). It is worth consulting with an expert.

7.2 Eligibility check before signing

It is mandatory to check eligibility before signing a contract! An error in assessing eligibility could cost you tens of thousands of shekels.

Recommended steps:

1. Check that all documents are up to date (ID cards, disability certificates, immigrant certificates)
2. בדקו האם יש לכם בעלות על נכסים בחו”ל שעלולים להשפיע

7.3 Using professional advice

When is it necessary to consult a real estate lawyer??

• When there are complex family situations (divorce, inheritance)
• When there is prior ownership of assets
• When it comes to significant amounts (over 3 million NIS)
• When there is multi-year tax planning
• When it comes to entitlement for the disabled – Care must be taken to comply with all conditions.

The services of the Halevi Law Firm in Jerusalem:

When you are considering a real estate transaction, it is important to seek the assistance of an experienced law firm with expertise in real estate taxation law. Halevi Law Firm, הממוקם בלב ירושלים, מתמחה בליווי עסקאות נדל”ן ובייעוץ מס מקרקעין מורכב.

The firm offers:

• Real estate taxation consulting – Checking eligibility for exemptions and discounts, including special discounts for the disabled
• Transaction support – From signing the contract to registration in the land registry
• Appeals – Representation before tax authorities and national districts
• Tax planning for generations – Transferring assets between generations in the best possible way

הניסיון הרב של המשרד בטיפול בעסקאות מורכבות באזור ירושלים מאפשר ללקוחות לקבל שירות מקצועי ואישי, תוך הבנה עמוקה של השוק המקומי והמאפיינים הייחודיים של נדל”ן בירושלים.

7.4 Additional tips for saving

Tip 3: Take advantage of benefits for immigrants and the disabled

If you are eligible for these benefits – don't give up! The benefits are extremely significant. Disabled people are eligible – make sure the apartment is registered for residential use only..

Tip 4: Pay attention to payment deadlines.

Late payment of purchase tax results in Fines and interest on arrears of 4% per year and a fine of up to 5% of the tax amount.

Tip 5: For the disabled – be careful about the residential designation

If you are disabled, you are eligible for a reduced tax of 0.5%, Don't rent the apartment. And do not use it for commercial purposes. The use must be for residential purposes only.

8. Frequently Asked Questions and Answers 

question: I purchased an apartment 15 years ago and have never lived in it. – Am I eligible for an exemption for a new apartment??

answer:

not. Ownership of the existing apartment, even if you have not lived in it, Denies eligibility לפטור/הנחה על דירה חדשה כ”דירה יחידה”. זאת כל עוד הדירה רשומה על שמכם או על שם בן/בת הזוג.

Possible solution: Sold the existing apartment and waited. 18 months לפני רכישת הדירה החדשה. כך תוכלו לרכוש כרוכש “דירה יחידה” וליהנות מהנחות משמעותיות.

Exception for eligible disabled people: נכה עם אי-השתכרות מעל 75% או נכה צה”ל מ-19% ישלם 0.5% גם על דירה שנייה, As long as it is his residence.

question: כיצד מחשבים “שווי הדירה” לצורך מס הרכישה?

answer:

The value of the apartment is determined by The highest Of these two:

1. In return for the deal – The price set in the contract
2. The value in the free market – According to real estate appraisals

The tax authorities may conduct Independent assessment for the apartment if they believe the listed price is lower than the true value. In that case, you will pay tax on the higher amount.

Important tip: אם קיבלתם “הנחה” ממוכר בגלל קשרים אישיים או עסקיים, Be sure to document The reason in the contract, to avoid a dispute with the Tax Authority.

question: מה ההבדל בין “מס רכישה” ל”מס שבח”?

answer:

• Purchase tax – Paid by thePurchaser When purchasing rights to a property. This is a tax on the transaction itself.
• Appreciation tax – Paid by therecognized On the capital gain (appreciation) on the apartment, i.e. the difference between the purchase price and the sales price.

example:

• You purchased an apartment in 2020 for 1,500,000 NIS → You paid Purchase tax
• You sold it in 2026 for 2,200,000 NIS → you will pay Appreciation tax For a profit of 700,000 NIS

question: Is it possible to appeal a capital gains tax decision regarding purchase tax??

answer:

Yes, absolutely. If you disagree with the assessment of your purchase tax or the denial of your eligibility for a discount/exemption, you are entitled to file a complaint. Appeal within 30 days The decision maker.

The appeal process:

1. Administrative appeal – Submission to the District Real Estate Taxation Director
2. Appeal to the Appeals Committee – If the administrative appeal is rejected
3. Appeal to the court – To the District Court, and in special cases up to the Supreme Court

Important to know: In many cases, an appeal filed by an experienced attorney Leads to a significant reduction In the assessment, even if not fully accepted.

question: אני נכה צה”ל עם 40% נכות – האם אני זכאי למס מופחת של 0.5%?

answer:

yes! According to Regulation 11 of the Real Estate Taxation Regulations, נכה צה”ל מ-19% ומעלה Eligible for a reduced purchase tax of only 0.5%.

The conditions:

1. Degree of disability 19% and above (You with 40% – eligible!)
2. The apartment For your personal residence Only (not for investment/rental)
3. Valid approval from the Ministry of Defense

Your special advantage:

• You can benefit from the reduced tax Also about a second apartment, as long as it is at your residence
• There is no value limit – the tax will be 0.5% on the entire value of the apartment.

example:

• An apartment worth 3,000,000 NIS for your residence
• Purchase tax: only 15,000 ₪ (instead of approximately 48,578 NIS)

question: I am disabled with a 60% non-earning disability – am I eligible for reduced tax??

answer:

Not according to regulation 11. The reduced tax of 0.5% is only given to disabled people with no income. Above 75% (You are with 60% – not eligible for the reduced tax).

However, You may be eligible for other purchase tax deductions under different regulations, depending on your specific situation.

recommendation: Consult with a real estate tax attorney to see what other deductions are available to you.

In conclusion: Proper planning saves a lot of money

Purchase tax is one of the most significant components of the cost of purchasing an apartment in Israel. A thorough understanding of the law, knowledge of the various rights and exemptions, and proper planning of the transaction – all of these can save you Tens and even hundreds of thousands of shekels.

Key points to remember:

✅ Check eligibility before signing. – An error can be costly
✅ Right timing – The 18 months between sale and purchase are critical
✅ Take advantage of benefits – Immigrants, disabled people (especially according to Regulation 11!), and returning residents – do not give up your rights
✅ Disabled people are eligible – Make sure that the apartment is for residential use only, even for a second apartment you will only pay 0.5%
✅ Plan ahead. – Especially in intergenerational transfers
✅ Consult with experts – In significant transactions, professional advice pays off

Want to make sure you don't pay sales tax on time?R?

Contact us with Halevi Law Firm in Jerusalem לייעוץ מקיף ומקצועי. המשרד מתמחה בדיני מקרקעין ומיסוי נדל”ן, ומלווה מאות עסקאות בכל שנה באזור ירושלים והסביבה.

This article is for general information only and does not constitute legal or tax advice. In any specific case, it is recommended to consult a lawyer or qualified tax advisor.

Last updated: January 2026