Tel Aviv Property Index · Costs

Everything you pay that is not the price

Buying and selling in Israel carries costs that do not exist, or are much smaller, in the UK, the US and Canada. The largest of them is a levy most sellers have never heard of until a bill arrives: half the increase in your land's value created by a planning decision you had nothing to do with.

₪144,538to buy, sole residence
₪339,000to buy, if you own elsewhere
50%betterment levy on planning uplift
11.3%of the price, worst case, on entry

Buying

Purchase tax is marginal and banded. A sole residence pays nothing on the first band and steps up from there. Anyone who owns property anywhere in the world lands on the additional ladder, which starts at 8% from the first shekel — and a flat kept in London or an inherited share counts.

On a ₪3,000,000 purchase that single distinction is worth roughly ₪194,462. Everything else — agent, legal, survey, bank fees, registration — is comparatively small and largely predictable.

Figure 1 — buying costs on a ₪3,000,000 flat

What buying costs on top of the price A ₪3,000,000 apartment, both purchase tax positions shown Purchase tax, sole residence ₪45,538 Purchase tax, if you own elsewhere ₪240,000 Agent fee, 2% plus VAT ₪70,800 Legal, 0.5% plus VAT ₪17,700 Survey, bank and registration ₪10,500 Sole residence: ₪144,538. Owning elsewhere: ₪339,000. The tax line is the only one that changes, and it changes by a factor of five.

Betterment levy, the one that surprises people

Under the Third Schedule to the Planning and Building Law, when an approved plan increases the value of your land, the local committee is entitled to half that increase. It becomes payable on realisation — when you sell, or when you take a building permit.

You did not apply for the plan and you may not have wanted it. In urban renewal areas, where plans routinely add substantial development rights, the bill can run to hundreds of thousands of shekels and it lands at the worst possible moment. There are statutory exemptions, they are narrow, and they are worth establishing before you market the property rather than after.

Figure 2 — betterment levy on an ₪800,000 uplift

The levy that catches sellers in renewal areas Betterment levy on an ₪800,000 planning uplift Uplift created by the plan ₪800,000 Betterment levy, 50% of it ₪400,000 Half of the increase in land value that a plan created, payable when you sell. It is assessed on the land, not on what you did, and it surprises people.

Capital gains tax is separate again. A sole residence is commonly exempt, and property held before 2014 is taxed on a linear apportionment.

Before you transact

What to establish first

  • Your purchase tax position, in writing. Sole residence or not is a factual question with a five-figure answer.
  • Whether a betterment levy is outstanding. Ask the local committee before you agree a price, not after.
  • Who pays the levy in your contract. It is negotiable, and buyers have been left with it.
  • Whether an exemption applies. The statutory exemptions are narrow and conditional. Establish it early.
  • Your capital gains exposure. Exemptions turn on facts about your other holdings, not about this flat.

Method

Purchase tax is computed on the marginal bands for the current tax year. Agent and legal fees carry VAT and are shown at common market rates; they are negotiable and yours may differ.

The betterment levy is 50% of the increase in land value attributable to an approved plan, under the Third Schedule to the Planning and Building Law 5725-1965, payable on realisation. The uplift itself is a matter for valuation and is frequently disputed.

Purchase tax brackets are index linked and change each January. Verify the current figures before relying on them.

This page is general information about how these charges work. It is not advice on any particular transaction, and the exemptions in particular turn on facts specific to you.

Israel Tax Authority purchase tax bands and capital gains guidance; Planning and Building Law 5725-1965, Third Schedule. Tel Aviv Property Index. Figures are recomputed on each data release; the date above each chart is the vintage shown. Provisional Tax Authority reporting is revised for several months after a quarter closes, so the two most recent periods in any series will move. This page is market information, not advice on any particular property or transaction.