David Halbwax L.L.M, International Legal counsel
Bracha & Co -October 2020-
Since July, 20, 2020 and for a period until January 15, 2021, Knesset approves investment home purchase tax cut proposed by Minister of Finance Israel Katz.
The purchase tax known as “Mass Rechisha“ imposed on property investment has been significantly reduced in order to stimulate activity within the local real estate market during the Corona crisis.
The temporary order initiated by the previous minister of finance, Moshe Kahlon, raising purchase tax for buyers of investment properties to 8% has been cancelled and the level of purchase tax for investors reverts to its former level of 5%.
Israel seeks to bring investors back to the real estate market.
The purchase tax for buyers buying their only home will remain the same.
But on investment homes, the tax is reduced to the following (NIS):
1 to 1,292,280 5%
1,292,280 to 3,876,835 6%
3,876,835 to 5,338,290 7%
5,338,290 to 17,794,305 8%
17,797,305 up to 10%
Note that these revised rates concern non-residents but also residents who own at least one other property.
If you are an Israeli resident and do not own any other property, you will be able to claim lower rates and be exempt up to NIS 1,744,505.
On the other hand, if you are a new immigrant, and even if you own another property, you will ALSO have an advantageous rate of 0.5% under certain conditions.
Bracha & co offers you its support to make the right investment choices in the real estate sector and guarantees tax optimization of your assets in Israel.