Who and When Pays Tax — Seller or Buyer (726)
In Israel, taxes in real estate transactions often raise many questions:
Who exactly pays the tax — the seller or the buyer — and at what point?
Let’s go through the details to avoid unexpected problems.
Main Taxes in a Transaction
In a typical apartment sale, there are two main taxes:
- Capital Gains Tax (Mas Shevach)
— paid by the seller if there is an increase in property value. - Purchase Tax (Mas Rechisha)
— paid by the buyer when acquiring the property.
It’s important to understand that these taxes are legally divided between the parties.
When the Seller Pays
The seller pays Mas Shevach in the following cases:
- selling an apartment with a capital gain;
- if the property does not qualify for tax exemptions (e.g., not the only home or recently purchased);
- after signing the sales contract and transferring ownership rights.
Payment is made through the Tax Authority (Rashut HaMasim) based on:
- the capital gain calculation;
- the seller’s tax declaration.
When the Buyer Pays
The buyer pays Mas Rechisha:
- immediately after signing the purchase agreement;
- the amount depends on the property’s value and tax rates;
- the tax is independent of the seller’s profit.
It is important that the buyer pays on time, otherwise penalties and interest may apply.
Key Points for Sellers and Buyers
- Sometimes the seller retains part of the sale proceeds to pay taxes.
- Buyers often include the tax in their planned budget.
- Understanding these rules helps prevent delays in transferring the apartment.
Tips from Unehasim
- Always clarify in advance who pays and how much.
- Coordinate the payment schedule in the contract.
- Use tax calculations to plan price and budget.
- Consult Unehasim specialists to avoid mistakes.
Contact Unehasim Specialists
If you are selling or buying an apartment in Haifa, Unehasim can help:
- calculate taxes for both seller and buyer;
- check exemptions and deductions;
- prepare a correct tax payment schedule;
- manage the transaction until funds are received.
Knowing who and when pays taxes makes the deal transparent and safe.
