Taxes When Selling an Apartment in Israel (6)
Selling real estate in Israel involves tax obligations. Let’s go over the main types of taxes, how they are calculated, and when you might qualify for an exemption.
1. Main Tax — Mas Shevach (Capital Gains Tax)
What it is:
A tax on the profit made from selling the apartment, calculated as the difference between the purchase price and the sale price, with permitted deductions.
Rate:
Up to 25% of the net profit.
When it's applied:
– If it’s not your only apartment
– If it was purchased after 1.1.2014 without tax benefits
– If less than 18 months have passed since you purchased it (depending on specific conditions)
✅ Exemptions from the tax may apply:
- Sale of a sole apartment:
If you own only one apartment, have held it for at least 18 months, and haven’t sold another apartment in the past 18 months. - Inheritance:
If you inherited the apartment and the deceased would have been eligible for a tax exemption. - Gift between close family members:
Exemptions may apply, depending on conditions and relationship.
How the tax is calculated:
Example:
You bought an apartment in 2010 for ₪1,000,000 and sold it in 2025 for ₪1,800,000.
Capital gain: ₪800,000.
You may deduct:
– Legal fees, realtor fees, renovations, purchase taxes, etc.
The remaining amount is taxed at 25% if you do not qualify for an exemption.
Other Possible Taxes and Fees
- Mas Mechira (Sales Tax): Rarely applied.
- Hetel Hashbacha (Betterment Levy): If a city plan increased the property value.
- Legal, notary, and agency fees.
Documents You'll Need
- Title deed (Tabu/Technion)
- Purchase contract
- Sale agreement
- Capital gains calculation
- Receipts for previous tax payments
Tips from Unehasim:
- Consult with a tax advisor in advance.
- Don’t rely on verbal estimates — request a tax simulation (דוח סימולציה) from the Israel Tax Authority.
- Submit tax declarations through the online Mas Hachnasa system.
- Factor all taxes into your net profit when planning your sale.
Want to know how much your apartment is worth and how fast you can sell it?
Contact a Unehasim agent — and let’s get started today.
