עברית
Olim purchase tax Benefits 2024
Published: August 4th, 2024
On July 29, 2024, the Knesset Finance Committee approved changes to the purchase tax regulations for Olim. These changes include a significant improvement in the tax benefits for Olim purchasing their single residential property.
The amendment was made within the framework of the Land Taxation (Appreciation and Purchase) Regulations (Purchase Tax), 2024, and aims to encourage the immigration of Diaspora Jews to Israel and improve the conditions for purchasing a home for new immigrants.
Summary of the main changes:
1. Updating the tax brackets and rates to benefit Olim purchasing their sole apartment.
2. Granting the benefit to Olim purchasing an apartment up to a total of 20,183,565 ILS only (apartments purchased for a higher amount will not qualify for the oleh benefit).
3. Removing the requirement for the Oleh to live in the purchased apartment to receive the benefit.
4. Extending the benefit period for an Oleh to before immigration, in cases where the apartment is purchased during its construction.
5. Canceling the tax benefit for an Oleh when purchasing land for residential or commercial construction.
Here are the updated tax rates for an Oleh (purchasing a single home):
1. Up to the amount of the first tax bracket for a single apartment, which as of today is 1,978,745 ILS (similar to an Israeli resident purchasing a single apartment) - no tax will be paid (0%).
2. From 1,978,746 ILS (the first tax bracket) to 6,055,070 ILS - a tax rate of 0.5% (half a percent) will apply.
3. From 6,055,071 ILS to 20,183,565 ILS - a tax rate of 8% (eight percent) will apply.
Additionally, an Oleh purchasing an apartment for an amount exceeding 20,183,565 ILS will not be entitled to the above purchase tax benefit at all.
The new benefit replaces the previous benefit, where new immigrants paid 0.5% up to the amount of the first tax bracket for an oleh (1,988,090 NIS) and an additional 5% on the amount above this threshold. Prior to the amendment, an Oleh was required to pay tax even on the first tax bracket (0.5%), unlike an Israeli resident who was exempt from tax on the first tax bracket.
Comparison of Purchase Tax for a Single Home - Before and After the Amendment:
As can be seen, the new benefit may result in significant savings of tens or even hundreds of thousands of shekels for olim purchasing their only home in Israel.
The new benefit for Olim offers them lower tax rates when purchasing a single home and distinguishes between an Oleh purchasing a single residential property and an Oleh who already owns a residential property in Israel before the purchase.
The benefit will be granted to Olim once in their lifetime for the purchase of a residential property for their own residence.
Special Conditions and Validity of the Benefit:
The benefit will be granted to olim who purchase a home up to one year before their immigration to Israel and up to seven years after.
Additionally, the amendment allows for aligning the conditions for Olim purchasing a property that is not their only home with the conditions that apply to Israelis or other buyers of an additional property.
Regarding Olim who purchased an apartment "on paper" or during its construction, the benefit is even more extensive and will be granted even if the property was purchased up to three years before immigration (instead of up to one year before immigration), provided that the construction has not yet been completed.
The benefit will take effect on August 15, 2024, and will apply to purchases by Olim from that date, subject to the publication of the amendment in the Official Gazette.
We will continue to provide updates as the amendment takes effect.
Furthermore, Olim who immigrated before the amendment takes effect and have not yet purchased a home using the previous benefit can choose between the previous benefit or the new benefit, according to the conditions set by law.
Our office will be happy to assist you at any time and advise you on any questions regarding home purchase, tax relief eligibility upon purchase and sale of a home, and more.
*The above does not constitute legal advice, tax advice, an opinion, or a substitute for individual legal consultation with a lawyer.
On July 29, 2024, the Knesset Finance Committee approved changes to the purchase tax regulations for Olim. These changes include a significant improvement in the tax benefits for Olim purchasing their single residential property.
The amendment was made within the framework of the Land Taxation (Appreciation and Purchase) Regulations (Purchase Tax), 2024, and aims to encourage the immigration of Diaspora Jews to Israel and improve the conditions for purchasing a home for new immigrants.
Summary of the main changes:
1. Updating the tax brackets and rates to benefit Olim purchasing their sole apartment.
2. Granting the benefit to Olim purchasing an apartment up to a total of 20,183,565 ILS only (apartments purchased for a higher amount will not qualify for the oleh benefit).
3. Removing the requirement for the Oleh to live in the purchased apartment to receive the benefit.
4. Extending the benefit period for an Oleh to before immigration, in cases where the apartment is purchased during its construction.
5. Canceling the tax benefit for an Oleh when purchasing land for residential or commercial construction.
Here are the updated tax rates for an Oleh (purchasing a single home):
1. Up to the amount of the first tax bracket for a single apartment, which as of today is 1,978,745 ILS (similar to an Israeli resident purchasing a single apartment) - no tax will be paid (0%).
2. From 1,978,746 ILS (the first tax bracket) to 6,055,070 ILS - a tax rate of 0.5% (half a percent) will apply.
3. From 6,055,071 ILS to 20,183,565 ILS - a tax rate of 8% (eight percent) will apply.
Additionally, an Oleh purchasing an apartment for an amount exceeding 20,183,565 ILS will not be entitled to the above purchase tax benefit at all.
The new benefit replaces the previous benefit, where new immigrants paid 0.5% up to the amount of the first tax bracket for an oleh (1,988,090 NIS) and an additional 5% on the amount above this threshold. Prior to the amendment, an Oleh was required to pay tax even on the first tax bracket (0.5%), unlike an Israeli resident who was exempt from tax on the first tax bracket.
Comparison of Purchase Tax for a Single Home - Before and After the Amendment:
As can be seen, the new benefit may result in significant savings of tens or even hundreds of thousands of shekels for olim purchasing their only home in Israel.
The new benefit for Olim offers them lower tax rates when purchasing a single home and distinguishes between an Oleh purchasing a single residential property and an Oleh who already owns a residential property in Israel before the purchase.
The benefit will be granted to Olim once in their lifetime for the purchase of a residential property for their own residence.
Special Conditions and Validity of the Benefit:
The benefit will be granted to olim who purchase a home up to one year before their immigration to Israel and up to seven years after.
Additionally, the amendment allows for aligning the conditions for Olim purchasing a property that is not their only home with the conditions that apply to Israelis or other buyers of an additional property.
Regarding Olim who purchased an apartment "on paper" or during its construction, the benefit is even more extensive and will be granted even if the property was purchased up to three years before immigration (instead of up to one year before immigration), provided that the construction has not yet been completed.
The benefit will take effect on August 15, 2024, and will apply to purchases by Olim from that date, subject to the publication of the amendment in the Official Gazette.
We will continue to provide updates as the amendment takes effect.
Furthermore, Olim who immigrated before the amendment takes effect and have not yet purchased a home using the previous benefit can choose between the previous benefit or the new benefit, according to the conditions set by law.
Our office will be happy to assist you at any time and advise you on any questions regarding home purchase, tax relief eligibility upon purchase and sale of a home, and more.
*The above does not constitute legal advice, tax advice, an opinion, or a substitute for individual legal consultation with a lawyer.
.jpg){kind=spacer}