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When Leasing a property the following are the costs that must be taken into account :
 
 
Real Estate Broker's Commission  (Dmai Tivuch)
On leasing property brokers customarily charge as follows
1.For a period of one year or more - one month rent.
2.For a period less than one year - 10% of the total rent (minimum charge $150)
Value Added Tax currently 16% is added to any commission due.

Lawyer's Fees

Most lawyers charge the equivalent of two weeks rent.
Value Added Tax is added to any commission due.

When Buying a property the following are the costs that must be taken into account:
 
 
Real Estate Broker's Commission
On the purchase or sale of property, brokers customarily charge 2% of the inclusive price of the property. Value Added Tax is added to any commission due.

Lawyer's Fees
Most lawyers charge 1% + VAT. (equivalent to 1.16%)

Purchase Tax (Mas Rechisha)
The Purchase Tax in respect of residential dwellings is an incremental (progressive) tax.
In order to calculate the tax, the total purchase price of the dwelling is divided into  (1-5) levels or brackets and a different rate of tax is applied to each bracket, as follows:
 
 
Bracket 1 is subject to tax at the rate of 0.00%-0.50%
Bracket 2 is subject to tax at the rate of 3.50%
Bracket 3 is subject to tax at the rate of 5.00%
 Bracket 4 is subject to tax at the rate of 8.00%
 Bracket 5 is subject to tax at the rate of 10.00%
 
This applies to a Local buyer who does not own another residence in Israel.
The range of each bracket is adjusted every 3 months in shekel terms in accord with changes to the Israeli Consumer Price Index and at present is roughly equivalent to the following:
 
 
Bracket 1 (0.00%) - First   1.517.210 ns
Bracket 2 (3.50%) - Next   1.517.210-1.799.605 ns
Bracket 3 (5.00%) - Next   1.799.605-4.642.750 ns
 Bracket 4 (8.00%) - Next   4.642.750-15.475.835 ns
 Bracket 4 (10.00%) - Next   15.475.835 ns and higher
 
 

A none Isareli who buys his first property in Israel will be taxed as followed .

 
 
Bracket 1 (5.00%) - First   1.289.350 ns
Bracket 2 (6%) - Next   1.089.350-3.268.040 ns
           Bracket 3 (7.0%) - Next   3.268.040-4.500.000 ns
               Bracket 4 (8.0%) - Next   4.500.000-15.000.000 ns       
Bracket 5 (10.0%) - Next   15.000.000 ns Or more         
 
 
Israeli or none Israeli  buying a second residence in Israel :Valid till Dec31/2014:
 
 
Bracket 1 (5.00%) - First     1.123.910 ns
Bracket 2 (6.00%) - Next   1.123.910-3.371.710 ns
Bracket 3 (7.00%) - Next 3.371.710-4.642.750 ns
        Bracket 3 (8.00%) - Next 4.642.750-15.475.835 ns   
         Bracket 3 (10.00%) - 15.475.835 ns and higher
 
 
 
Tax simulator :
https://www.misim.gov.il/simulator_mekarkein/

 

The information contained on this page is a general guide.  

Prospective purchasers must obtain specific legal and professional advice from qualified Israeli legal counsel or tax advisors.  
 

 

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