Taxes owed when selling or selling home in Israel :
It is important to consider that when selling a home in Israel, you will, generally, as there are exemptions, be taxed on the profit you will make from the sale. This is referred to as the “Capital Gain Tax.” There are some exceptions which might excuse you from paying this tax. It is therefore wise to consult with your real estate attorney in order to discuss whether or not the exemptions apply to your unique situation.
If you plan to rent your home, you will need to consider “income tax,” as you will be required to pay a tax on the money that your tenants pay you for usage of your home. You may receive an exemption if your rent is below a specific amount.
Taxes owed when purchasing a home in Israel:
Those who are looking to purchase a new home in Israel will have to consider the “purchase tax,” or Mas Rechisha, a tax which new-home buyers are required to pay. The amount owed will be determined by several factors, including the price of the home as well as the status of the buyer (new immigrant, tourist, long-time resident) and the number of other properties owned by the buyer.
The payment of this tax becomes relevant once your contract has been signed and a personal assessment has been completed with the Israel tax authorities. It must then be paid in full within 60 days. Your real estate attorney should be responsible for handling the Mas Rechisha on your behalf, informing you of what you need to do and when you need to do it, as to ensure that you avoid late payments, which may invoke penalties or interest.
To calculate the Mas Rechisha of the property of your interest, use the link here, which will provide a Mas Rechisha Purchase Tax Calculator in English, thanks to buyitinisrael.com.