Israel Purchase Tax (Mas Rechisha) for Non-Residents: 2026 Rates, Calculation, and Exemptions

For a foreign buyer purchasing Israeli property, purchase tax is often the single largest transaction cost — bigger than attorney fees, Land Registry fees, or agent commissions. On a NIS 3,000,000 apartment in Tel Aviv, a non-resident pays NIS 240,000 in Mas Rechisha before receiving a single key. On a NIS 6,000,000 property, the bill climbs to NIS 480,000.

Yet this tax catches many foreign buyers off guard. It does not appear in the listing price, the real estate agent rarely volunteers the full calculation, and the brackets are different from what Israeli residents pay. Foreign investors, diaspora families purchasing a pied-à-terre, and non-resident buyers acting as guarantors for a family member's purchase all need to understand how this tax works — and plan for it well before signing the purchase contract.

1. What Is Mas Rechisha?

Mas Rechisha (מס רכישה) is Israel's property purchase tax. It is governed primarily by the Real Estate Taxation Law (Chok Misui Mekarke'in) 5723-1963, specifically Sections 9–11 and the Third Schedule to that law. It is payable by the buyer — not the seller — on the full declared purchase price or market value, whichever is higher.

The tax applies to virtually every purchase of Israeli real estate: apartments, houses, land plots, commercial units, and agricultural land. There is no minimum threshold below which the purchase is exempt for non-residents. Even a NIS 500,000 storage unit attracts Mas Rechisha at the applicable rate. The rate depends on the type of property: the 8%/10% brackets in this guide apply to residential apartments, while most property that is not a residential apartment, such as commercial premises and land, is taxed at a flat 6% for residents and non-residents alike.

"Purchase" is read broadly. The tax also applies to an off-plan apartment bought from a developer, to long-term lease rights from the Israel Land Authority (most Israeli land is held this way), and to the assignment of someone else's purchase contract, where it is charged on the price paid to the outgoing buyer. The buyer remains liable to the Tax Authority whatever the contract says: the parties can agree that the seller will bear part of the cost, but the Tax Authority is not bound by that clause and collects from the buyer, who is left with a private claim against the seller.

Mas Rechisha is collected by the Israel Tax Authority (Rashut HaMisim) through its Real Estate Taxation Offices (Misui Mekarke'in), which operate regional offices in Tel Aviv, Jerusalem, Haifa, Netanya, Beer Sheva, and other cities. Your Israeli attorney handles the filing and payment on your behalf as a standard part of the conveyancing process.

2. Who Counts as a Non-Resident for Purchase Tax Purposes?

For Mas Rechisha purposes, residency is determined under the Israeli Income Tax Ordinance (Nusach Chadash) 5721-1961, not under Israeli immigration law. You are treated as a non-resident if Israel is not your "center of life" — meaning the place where you spend most of your time, maintain your primary family connections, and run your main economic activities.

Holding an Israeli passport, being a registered Israeli voter, or having Israeli relatives does not automatically make you a resident for tax purposes. The Tax Authority looks at physical presence (number of days spent in Israel per year), location of immediate family, employment or business base, and property ownership pattern. The test is assessed each tax year, which matters: a buyer who splits time between New York and Tel Aviv may land in a different category year to year depending on the facts.

Non-residents cannot access the favorable "single apartment" (dira yehida) brackets that give Israeli residents a zero rate on the first NIS 1,978,745 of a purchase. Every shekel of a non-resident's purchase price enters the 8% band immediately. That is a NIS 150,000–200,000 cost difference on a mid-range apartment purchase — not a rounding error.

Residency is only half of the test. The reduced brackets are for an Israeli resident buying a sole apartment. An Israeli resident who already owns an apartment and buys another — including many diaspora Israelis who are tax residents and keep a family flat — pays the same 8% and 10% rates as a non-resident. If an agent tells you that you "qualify for resident rates," have a licensed Israeli attorney confirm both conditions in writing before you sign.

3. 2026 Rates: Non-Residents vs. Residents

The bracket thresholds for Mas Rechisha are normally updated each January for inflation. Under the Arrangements Law (Chok HaHesderim), the government froze the brackets from 16 January 2025 until 15 January 2028, so the 2025, 2026 and 2027 rates are identical.

Non-resident rate (2026 — frozen)

These brackets apply to a residential apartment. Most non-residential property (offices, shops, land) is taxed at a flat 6% of the price.

Israeli resident — single apartment rate (2026 — frozen)

The gap between the two tracks is stark. A resident buying a single apartment at NIS 3,000,000 pays about NIS 45,500. A non-resident buying the identical apartment pays NIS 240,000, a premium of about NIS 194,500 purely because of residency status. This difference amplifies further as prices rise.

4. How to Calculate Your Mas Rechisha

The calculation is marginal — each bracket applies only to the portion of the price within that band, not to the full price. Three worked examples using the 2026 rates:

Example A — NIS 2,000,000 apartment

• NIS 0 – NIS 2,000,000 × 8% = NIS 160,000
• Total Mas Rechisha: NIS 160,000 (8.0% of purchase price)

Example B — NIS 4,500,000 apartment

• NIS 0 – NIS 4,500,000 × 8% = NIS 360,000
• Total Mas Rechisha: NIS 360,000 (8.0% of purchase price)

Example C — NIS 7,000,000 penthouse

• First NIS 6,055,070 × 8% = NIS 484,406
• Remaining NIS 944,930 × 10% = NIS 94,493
• Total Mas Rechisha: NIS 578,899 (8.27% of purchase price)

5. The New Immigrant (Oleh) Discount

The biggest Mas Rechisha reduction available to a foreign buyer is the new immigrant track under Regulation 12A of the Purchase Tax Regulations. An Oleh — someone who has moved to Israel under the Law of Return 5710-1950 and received an Oleh's Certificate (teudat oleh) from the Ministry of Interior — qualifies for dramatically lower purchase tax rates on one sole-apartment purchase made from one year before to seven years after their Aliyah date.

Oleh Mas Rechisha rates (2026 — frozen)

Above NIS 6,055,070 the Oleh pays the ordinary sole-apartment rates on the excess (8% up to NIS 20,183,565 and 10% above). The Oleh track is for a sole apartment; an Oleh buying an additional apartment pays the standard 8%/10% rates.

Savings compared to standard non-resident rate

On a NIS 3,000,000 apartment, an Oleh pays about NIS 5,100 in Mas Rechisha (0.5% on NIS 1,021,255), compared to NIS 240,000 for a non-resident without Oleh status, a saving of about NIS 235,000 on a single transaction. That saving alone often more than covers the entire legal and conveyancing costs of the purchase.

Olim who have not yet moved to Israel

Israeli diaspora members who hold citizenship under the Law of Return but have not yet made Aliyah do not qualify for the Oleh Mas Rechisha rate. Citizenship and Oleh status are distinct. Making Aliyah requires formally registering at the Jewish Agency or directly with the Ministry of Interior and receiving an Oleh's Certificate. The tax benefit is a direct incentive attached to the act of immigration, not to Jewish heritage or Israeli nationality.

6. The Payment Process Step by Step

The Mas Rechisha process runs on a tight statutory timetable. Your attorney manages most of it, but knowing the stages prevents surprises:

Stage 1: Filing the declaration (within 30 days)

Within 30 days of signing the purchase contract (heskem rechisha), your attorney files the purchase declaration (Form 7002) electronically through the Tax Authority's online real estate taxation system. The declaration states the property details, purchase price, buyer's identity and residency status, and the applicable track (resident/non-resident/Oleh). The tax is self-assessed: the Tax Authority does not send a bill or a reminder, and missing the filing deadline can bring a separate fine on top of interest and linkage.

Off-plan buyers are caught out most often. In a purchase from a developer, you may pay the price in installments over two or three years of construction, but both deadlines still run from the day you sign, and the tax is calculated on the full contract price. A sales representative's assurance that purchase tax is "paid at handover" is wrong. The developer's lawyers also do not file your declaration; that is your own attorney's job, so get written confirmation that Form 7002 was filed and the tax paid.

Stage 2: Tax Authority review and assessment

Once the declaration is filed, a payment voucher is generated for the self-assessed amount. If the assessor accepts the declared price, the self-assessment stands. If the assessor disputes the declared value, the buyer receives a revised assessment and has 30 days to object (see section 4).

Stage 3: Payment (within 60 days of signing)

The full Mas Rechisha amount must be paid within 60 days of the date the purchase contract was signed, under Section 90A of the Real Estate Taxation Law. Payment is made by bank transfer to the Israel Tax Authority's designated account, or in person at any Post Office (Doar) branch using the payment slip. Once payment is received, the Tax Authority issues an approval certificate (ishur misim).

Stage 4: Tax clearance certificate

With the approval certificate in hand, your attorney can proceed to the Land Registry (Lishkat Rasham HaKarkaot, commonly called Tabu) to register the transfer of title in your name. Without this certificate, the Tabu registrar will not accept a transfer request — no exceptions.

7. Purchase Tax and the Land Registry

The Mas Rechisha approval certificate is one of three mandatory clearances your attorney must produce before the Land Registry registers you as the new owner. The others are:

• Betterment levy clearance (ishur hetel hashbacha): Issued by the local planning authority (va'adat tichun mekomit) confirming that no outstanding betterment levy (hetel hashbacha) is owed on the property. Betterment levies arise when planning decisions increase the property's value — for instance, after rezoning or permit approval for an additional floor. Outstanding levies must be paid before the registrar accepts any transfer.
• Municipal tax clearance (ishur arnona): Issued by the municipal tax department confirming that all arnona (property rates) up to the closing date have been settled.

8. Timing and Planning Considerations for Non-Resident Buyers

The Mas Rechisha rates are set by statute and cannot be negotiated. But where the law allows a lower rate or a refund, it is not applied automatically: you have to claim it, sometimes after signing, as with the Oleh refund described in section 5. The structural decisions, though, are made before you sign.

Should you make Aliyah before buying?

If you have any realistic intention to make Aliyah within the next two to three years, completing the immigration process before purchasing Israeli property can save you NIS 150,000–400,000 in Mas Rechisha depending on the purchase price. The Jewish Agency's Aliyah processing time is currently three to eight months. That timeline can run in parallel with property searching.

Budget for Mas Rechisha from the start

Israeli property listings quote asking prices that do not include Mas Rechisha, attorney fees (typically 1%–2% of purchase price), or agency commission (typically 2% + VAT from each side). A NIS 3,000,000 advertised apartment costs a non-resident closer to NIS 3,420,000 all-in. Buyers who underestimate transaction costs sometimes find themselves short at closing.

Gifting vs. buying

Some families consider gifting Israeli property to a child or relative who is an Israeli resident, hoping the relative will then apply the favorable resident Mas Rechisha bracket. The Tax Authority looks through these arrangements. A contemporaneous gift followed by an immediate back-transfer, or a gift that tracks the terms of an intended purchase, can be disregarded under the Land Taxation Law's anti-avoidance provision (Section 84). Genuine gifts have their own purchase tax rules: under the Purchase Tax Regulations, a transfer without consideration from an individual to a relative (a spouse, parent, child, grandchild, a child's spouse, or a sibling) is taxed at one-third of the regular purchase tax, and a transfer of a residential apartment to a spouse who lives there with the giver is exempt. Legal advice specific to your family structure is essential before attempting this.

Keep furniture out of the price, honestly

Purchase tax is charged on the price of the property, including parking spaces and storage rooms sold with it. Movable furniture and appliances that are genuinely sold under a separate agreement at a realistic value are not part of the taxable price. Inflating the furniture figure to shrink the taxable base invites a challenge and a revised assessment, so keep the furniture agreement separate and the values defensible.

If the purchase is cancelled

If a signed purchase is genuinely cancelled, the Tax Authority must refund purchase tax already paid once it is satisfied that the sale was cancelled (Section 102 of the Land Taxation Law). Buyer and seller normally file a joint sworn declaration of cancellation (Form 6130), verified by a lawyer. The Tax Authority checks that the cancellation is real rather than a disguised resale, looking at how long the contract was in force, how much was paid, and whether the buyer took possession. File promptly: long delays have defeated refund claims.

Joint purchases with an Israeli resident

If you purchase Israeli property jointly with an Israeli resident spouse or family member, each party's share is taxed separately at their respective rates. A 50/50 purchase between a non-resident and a resident who is buying their only apartment means 50% of the purchase price is taxed at the favorable resident brackets and 50% at the non-resident rate. This is a legitimate structure and is fairly common in diaspora family purchases. Document the ownership split clearly in the purchase contract and confirm it with your attorney, as the Land Registry will register both names with the proportions stated.