Israeli Tax : What if Housing Was No Longer a Barrier to Aliyah?

Israeli Taxation: Making Housing No Longer a Barrier to Aliyah

The time for reflection appears to be over – Dear Olim, Israel is waiting for you and finally making your settlement easier!

Whether you choose to rent or buy, this article will interest you as state assistance is now available for everyone.

Dear Future Tenants, the Ministry of Aliyah and Integration is increasing its housing allowance and will now provide, for 2 years, a monthly allowance of:

• Up to 2,000 shekels in national priority areas (such as Judea Samaria, Beer-Sheva, Nahariya, Nof HaGalil, Tiberias, Yokneam, etc.),
• 600 shekels elsewhere,
• 1,500 shekels, regardless of your place of residence, for students enrolled in a Minhal Hastudentim program of the Ministry of Aliyah and Integration.

Dear Future Homeowners, you have not been forgotten, as the legislature has provided tax relief regarding the acquisition tax depending on your aliyah date.

For aliyah made before August 15, 2024, the purchase of a residential property, which must serve as the buyer’s residence, will be subject to an acquisition tax between:

• 0.5% on the portion of the value up to 1,988,090 Shekels
• 5% on the portion of the value above this amount

For aliyah made after August 15, 2024, the purchase of a property which must:

• Be for residential use
• Serve as the buyer’s residence
• Be the only real estate property owned by the concerned party

Will be subject to an acquisition tax between:

• 0% on the portion of the value up to 1,978,745 Shekels
• 0.5% on the portion of the value between 1,978,745 and 20,183,565 Shekels
• 10% on the portion of the value above this amount

It should be noted that these rates will be applicable subject to the following conditions:

• Being a new immigrant
• Applicable within 7 years from the immigration date or 1 year before immigration
• Applicable only once in a lifetime

Furthermore, if these rates were not correctly applied on the transaction date, this can be remedied by filing a refund request.

Finally, for new immigrants who made their aliyah before August 15, 2024, since this regime is not conditional on owning no real estate property, it is advisable, if a second property acquisition is planned within 7 years of aliyah, to first apply the preferential regime benefiting first-time buyers.

Our Law Firm, enhanced by its French and Israeli lawyers and tax advisors, has set itself the mission of ensuring high-level support through our dual expertise and presence in France and Israel, and remains at your disposal to implement solutions best adapted to your specific needs.

Note: This article is provided for informational purposes only; consequently, each file/case must be subject to a detailed study. As such, the information contained in this article does not constitute legal advice.