Do non-residents with Israeli property need to file an annual tax return in Israel?

It depends on the level of rental income. Non-residents whose gross monthly rent is below approximately NIS 5,654 (2026 threshold) pay no tax and need not file. Above that threshold, or if they sell Israeli property and owe capital gains tax, they must file a return with the ITA. The 10% flat-rate election under Section 122 of the Income Tax Ordinance also requires annual self-assessment and direct payment by January 31, even though no formal Form 1301 is submitted under this track.