Does Israel impose a wealth tax on residents' worldwide net assets?

The Income Tax Ordinance (New Version) 5721-1961 is the foundation of Israeli personal taxation and is structured entirely around income flows, not asset balances. Section 2 lists the taxable categories — business profits, employment income, dividends, interest, rent, royalties, and capital gains — and none of these is a periodic charge on net worth. There is no standalone Wealth Tax Law in Israel. Proposals to introduce one have surfaced periodically in academic and Knesset discussions but none had been enacted as of 2026. The only property-related annual levy in Israel is arnona (municipal property tax), which is a use-based charge calculated per square meter of property area — it is not a net worth levy and applies to occupants, not to all asset holders. For a full overview of how Israeli tax residency triggers obligations, see the guide on tax residency in Israel.

For new immigrants (olim chadashim) and returning residents (toshavim chozrim), the absence of a wealth tax combines favorably with the 10-year foreign-source income exemption under Section 14 of the Income Tax Ordinance. During this window, foreign dividends, interest, capital gains, and business income are exempt from Israeli tax, and foreign assets need not be reported to the Israeli Tax Authority. Once the exemption window closes, those foreign income streams become taxable as worldwide income. Israel's inheritance law abolished estate duties decades ago, so inherited wealth — whether foreign or domestic — passes to heirs without any Israeli inheritance tax or death duty, though capital gains tax may apply when the inherited asset is subsequently sold.

From the full guide: Tax Residency in Israel: When You Become a Taxpayer and What It Means

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