A 2026 guide to Israeli property taxes for foreign buyers: purchase tax (Mas Rechisha), capital gains (Mas Shevach), VAT 18%, rental income, Arnona, and reporting.
Israel taxes real estate at several levels — national income and capital-gains tax, transaction taxes (purchase tax and VAT), and municipal Arnona. Through mid-2026 most headline rates held, but indexation was frozen: VAT rose to 18% (Jan 2025), purchase-tax and income brackets are frozen at Jan-2024 levels until 2027, and a higher surtax now applies to large capital incomes.
For a foreign buyer the core figures are: purchase tax of 8% up to ₪6,055,070 and 10% above; capital gains of 25% on the real gain plus up to a 5% surtax over ₪721,560 (top ~30% on gains); and rental income that is exempt under ~₪5,470/month or taxed at a flat 10% on gross. Indexed thresholds are frozen now and resume in 2027 — verify the live figures at signing.
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