Tax Obligations for Sellers in Haifa: Purchase Tax, Capital Gains Tax and Exemptions (818)

Selling real estate in Haifa is not only about finding a buyer and signing a contract.
One of the most important stages is understanding the seller’s tax obligations.
Incorrect tax calculations can lead to delays, unexpected expenses and even the collapse of the deal.

In Haifa — a city with a diverse real estate market, from old buildings to TAMA 38 projects and new developments — tax issues require special attention.
This article explains the main taxes: purchase tax (Mas Rechisha), capital gains tax (Mas Shevach), and possible exemptions.

Purchase Tax (Mas Rechisha): A Buyer’s Tax That Affects the Seller

Although purchase tax is paid by the buyer, it directly influences the seller’s transaction.

Why It Matters for the Seller

• the buyer must include the tax in their budget
• if the tax is too high, the buyer may withdraw
• investor deals often depend on the purchase tax amount

When Purchase Tax Affects the Price

In Haifa this is especially noticeable:

• when selling investment properties
• when selling apartments with tenants
• when selling second or third properties

If the buyer pays a high tax, they often try to negotiate a lower price.

Capital Gains Tax (Mas Shevach): The Seller’s Main Tax

Mas Shevach is the primary tax paid by the seller.
It is calculated on the difference between the purchase price and the sale price.

What Is Included in the Calculation

• purchase price
• sale price
• improvement expenses
• attorney fees
• realtor fees
• registration and administrative costs

When the Tax Can Be High

• if the apartment was bought as an investment
• if the apartment was purchased recently
• if the seller owns multiple properties

When the Tax Can Be Low or Zero

• if the apartment is the seller’s only residence
• if the seller owned the apartment for many years
• if the seller qualifies for an exemption

Exemptions from Capital Gains Tax (Mas Shevach)

Israel offers several exemptions that can significantly reduce the seller’s tax burden.

Exemption for a Single Residential Property

A seller may receive an exemption if:

• the apartment is their only residence
• they owned it for at least 18 months
• they lived in it or rented it legally

Inheritance Exemption

If the apartment was inherited, an exemption may apply if:

• the deceased met the exemption criteria
• the heir is a direct relative

Exemption When Replacing a Home

If the seller is purchasing a new home, a partial exemption may apply.

Exemptions for Seniors

In some cases, elderly sellers may receive additional benefits.

Documents Required for Tax Calculation

• purchase agreement
  • sale agreement
  • receipts for renovations
  • inheritance documents
  • residency confirmations
  • documents proving single‑residence status

How to Avoid Mistakes in Tax Calculations

Check the Property Status in Advance

Many sellers learn about taxes only after signing — a costly mistake.

Collect All Supporting Documents

The more documented expenses, the lower the tax.

Verify Eligibility for Exemptions

Many sellers qualify for exemptions without knowing it.

Work with a Real Estate Attorney

Tax mistakes can cost tens of thousands of shekels.

Seller’s Checklist

• Verify whether the apartment is a single residence
  • Calculate potential Mas Shevach
  • Check eligibility for exemptions
  • Collect documents for expenses
  • Clarify tax obligations in advance
  • Explain to the buyer how purchase tax affects the deal
  • Consult with a real estate attorney

Unehasim Recommendations

• Tax issues must be addressed before listing the property.
  • In Haifa, it is important to consider the impact of TAMA 38 and registration status on taxes.
  • Proper tax calculations help avoid delays and disputes.
  • An attorney should accompany the process from day one.

Professional Support from Unehasim

The Unehasim team provides full legal and analytical support throughout the transaction, including:
• calculating Mas Shevach and checking exemptions
• analyzing documents and expenses
• preparing tax declarations
• coordinating with appraisers and tax authorities
• protecting the seller’s interests at every stage

The professional approach of Unehasim helps the seller avoid mistakes, reduce tax liability and complete the transaction as profitably as possible.