Can I pay single-apartment purchase tax rates in Israel if I buy a new home before selling my old one?

Israeli purchase tax runs on two scales. An Israeli resident buying their only apartment pays 0% on the first slice of the price and graduated rates above it, while any additional residential apartment is taxed at 8% from the first shekel and 10% above a higher threshold. Section 9(c1a) treats a replacement apartment as a single apartment for this purpose, because the buyer will not end up holding two homes. Spouses and their minor children count as one purchaser, so an existing apartment owned by either spouse must be the one sold. Non-residents cannot use the relief, because the single-apartment rates are reserved for Israeli residents.

The practical risk is timing. Buyers often sign for a new apartment expecting a quick sale of the old one, and a slow market can push them past the deadline and into a much larger tax bill. The declaration filed with the Israel Tax Authority should state that the purchase is a replacement, and the sale contract for the old apartment should be signed, not merely negotiated, within the window. A buyer who sees the deadline slipping should take advice early, because linkage and interest run on the unpaid difference. Our guide to purchase tax in Israel sets out the current brackets and filing steps.

From the full guide: Purchase Tax (Mas Rechisha) for Foreign Buyers in Israel

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