Do non-residents have to pay tax on rental income from Israeli property?

Yes. Under the Income Tax Ordinance, rental income from property located in Israel is sourced in Israel and is therefore taxable by the Israel Tax Authority regardless of where the landlord lives. Non-residents must file an annual return if their monthly rent exceeds the exemption threshold, approximately NIS 5,654 per month for 2026. Below that threshold, the income is completely exempt and no return is required.