Purchase tax brackets changed in 2025. An investor who doesn't know the numbers could pay tens of thousands more than necessary. Here's what matters.
Purchase tax is one of the largest expenses when buying an investment property. On a 1,500,000 NIS property, the investor's purchase tax is approximately 120,000 NIS. That's an amount that directly impacts yield for years ahead.
An investor who doesn't plan the deal structure correctly pays more tax than needed.
For a second property and above (investment property): Up to 6,055,070 NIS: 8% purchase tax. Above 6,055,070 NIS: 10% purchase tax.
For first home (not relevant for most investors): Up to 1,978,745 NIS: 0%. 1,978,745 to 2,347,040: 3.5%. 2,347,040 to 6,055,070: 5%. Above 6,055,070: 8% and 10%.
Numerical example: Investment property at 2,000,000 NIS = purchase tax of 160,000 NIS. That's 8% of the price, directly from your pocket.
Timing Sales and Purchases If you're selling one property and buying another within 18 months, you may benefit from reduced brackets as a "replacement property." This can save tens of thousands.
Check Ownership Structure In certain cases, purchasing under different names or through specific legal structures can reduce tax liability. Consult a real estate lawyer.
Utilize Existing Exemptions New immigrants, disabled veterans, and bereaved families may qualify for relief. Check eligibility before purchasing.
From our experience advising hundreds of investors, three mistakes keep repeating.
Not calculating purchase tax as part of yield An investor who calculates yield based on property price alone gets an inaccurate picture. Purchase tax is part of entry cost and affects yield for years.
Not checking eligibility for relief Many investors don't know they qualify for exemptions and pay full tax.
Not planning timing Buying and selling with correct timing can save tens of thousands. Planning ahead is critical.
Flamingo's AI advisor answers instantly on ownership, investment and property management questions in Israel
At Flamingo, we don't just manage properties. We guide investors from the moment they decide to purchase.
Deal feasibility assessment including purchase tax. Precise net yield calculation accounting for all expenses. Authority liaison and professional guidance.
Using our real estate deal simulator lets you see exactly how purchase tax impacts your yield.
How much purchase tax does an investor pay on a second property? Investors pay 8% on the property portion up to 6,055,070 NIS and 10% above. For example, on a 2,000,000 NIS property you'll pay 160,000 NIS.
Can purchase tax payments be spread out? Yes, you can request installment payments from the tax authority. Interest on installments is relatively low.
When is the tax paid? Purchase tax is due within 60 days of signing the agreement. Late payment incurs interest and indexation.
Does purchase tax vary by region? No. Purchase tax is uniform nationwide, depending only on price and buyer status.
Purchase tax is an unavoidable expense. But it can be planned and minimized.
Know the brackets, check eligibility for relief, and time your purchase correctly. Each of these steps can save tens of thousands.
Talk to us before closing a deal. We'll help calculate all expenses including purchase tax and understand the real yield.
Flamingo's AI advisor answers instantly on ownership, investment and property management questions in Israel
