Mas rechisha — Israel's purchase tax — is the single largest transaction cost foreign buyers face when acquiring Israeli real estate. Understanding exactly how it is calculated, when it is due, and what exemptions may apply is essential before committing to any property. This guide covers the complete picture for 2026.
What Is Mas Rechisha?
Mas rechisha (מס רכישה) translates literally as "purchase tax." It is a one-time tax levied on the buyer — not the seller — upon acquisition of real estate in Israel. Administered by the Israel Tax Authority (Rashut HaMisim), it applies to all property transactions: apartments, houses, land, and commercial units. It is assessed on the purchase price declared in the sales contract, which must be filed with the tax authority within 30 days of signing.
Unlike stamp duty in the UK or transfer tax in many European countries, mas rechisha is structured as a progressive tax with different rate brackets depending on the buyer's profile: whether they are an Israeli resident purchasing their only home, an Israeli resident purchasing an additional property, or a foreign national (non-resident).
The Foreign Buyer Rate: 8% Flat
For foreign nationals — individuals who are not Israeli citizens and do not hold permanent residency — the purchase tax rate is a flat 8% on the full purchase price, with no lower bracket or threshold relief. This rate was significantly increased in 2015 as part of a government effort to cool speculative demand, and it remained in place through the 2024–2026 period.
Important: "Foreign buyer" for tax purposes means a person who is not a resident of Israel at the time of purchase. Holding an Israeli bank account, visiting frequently, or having a long-term visa does not change this status. Only formal aliyah (immigration) or Israeli citizenship changes the applicable rate.
The 8% rate applies to the entire transaction value — there is no stepped threshold for foreign purchasers. A ₪1.5 million apartment and a ₪15 million penthouse are both taxed at 8% of the full declared price. This is a key planning consideration for DDG Members who are weighing purchase timing and property selection.
Exemptions and Reductions: Olim and New Immigrants
The principal exemption available to foreign-origin buyers is the oleh chadash (new immigrant) benefit. Under Israeli law, a person who makes aliyah — formally immigrating to Israel under the Law of Return — is entitled to a reduced purchase tax rate for a single property purchase, subject to conditions:
- The purchase must occur within the qualifying window (generally within 7 years of aliyah, though the precise window may differ for purchases before vs. after immigration)
- The reduced rate applies only to one property — subsequent purchases are taxed at standard rates
- The property does not need to be a primary residence, but must meet qualifying criteria
The reduced rate for qualifying olim is significantly lower than the foreign buyer rate, making aliyah planning an important financial consideration for buyers who are seriously considering a permanent move to Israel. DDG recommends all such DDG Members consult a qualified Israeli tax lawyer before completing their purchase.
Israeli Residents: The Standard Bracket System
For comparative purposes, Israeli residents buying their only apartment pay no tax on the first ₪1,978,745 (2025 bracket, updated annually), a reduced rate on the next band, and higher rates above that. Residents buying an additional property pay an 8% flat rate on the full value — the same as foreign buyers. This shows that the 8% rate for foreign nationals places them in the same category as Israeli residents making secondary purchases, not the punitive "foreign speculation" category sometimes assumed.
How to Calculate Your Tax: Worked Examples
Example 1: Standard Foreign Purchase — ₪1,500,000 Apartment
| Component | Calculation | Amount (₪) |
|---|---|---|
| Purchase price | — | 1,500,000 |
| Mas rechisha (8%) | ₪1,500,000 × 8% | 120,000 |
| Lawyer fees (buyer's lawyer, ~1%) | ₪1,500,000 × 1% | 15,000 |
| Notary / apostille fees | Fixed + per-document | 3,000–6,000 |
| Municipal registration (tabu) | Fixed fee | ~600 |
| Bank transfer / SWIFT fees | Varies by bank | 1,000–3,000 |
| Total acquisition cost | ~1,642,000–1,647,000 |
Example 2: High-Value Purchase — ₪5,000,000 Apartment
| Component | Amount (₪) |
|---|---|
| Purchase price | 5,000,000 |
| Mas rechisha (8%) | 400,000 |
| Lawyer fees (~0.8–1%) | 40,000–50,000 |
| Notary / apostille fees | 5,000–10,000 |
| Municipal registration (tabu) | ~600 |
| Bank transfer fees | 2,000–5,000 |
| Total acquisition cost | ~5,450,000–5,468,000 |
Note that lawyer fees in Israel are often negotiated and can range from 0.5% to 1.5% depending on transaction complexity. For pre-sale purchases involving a developer's own lawyer on one side, the buyer's independent legal representation is especially important and should not be waived.
Payment Timeline: When Is Tax Due?
Israeli law requires the sales contract (chozeh mechirah) to be filed with the Israel Tax Authority within 30 days of signing. The tax authority then issues an assessment, and purchase tax must be paid within 60 days of the signing date. Late payment attracts linkage (indexation to the consumer price index) plus interest charges, so prompt payment is essential.
For pre-sale purchases where the full price is paid in installments over several years, the tax is calculated on the full contract price at signing and must still be paid within the standard 60-day window — not spread over the payment schedule. This means buyers must have liquid capital available at signing beyond just the first installment payment.
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DDG advisors will walk you through the exact tax and acquisition costs for any property we present — before you commit to anything.
Book a Free 30-Min Call →Complete Acquisition Cost Breakdown Table
The table below shows total expected costs as a percentage of purchase price, across three typical transaction values:
| Cost Item | ₪1.5M Property | ₪3M Property | ₪6M Property |
|---|---|---|---|
| Purchase price | 100.0% | 100.0% | 100.0% |
| Mas rechisha (8%) | 8.0% | 8.0% | 8.0% |
| Buyer's lawyer (1%) | 1.0% | 0.9% | 0.8% |
| Notary / apostille | 0.3% | 0.2% | 0.1% |
| Tabu registration | 0.04% | 0.02% | 0.01% |
| Bank / FX fees | 0.1–0.2% | 0.1% | 0.05% |
| Total cost premium | ~9.4–9.6% | ~9.2–9.4% | ~9.0–9.1% |
Lawyer Fees in Detail
Israeli real estate transactions require a licensed Israeli advocate (lawyer). For a foreign buyer, this means engaging an Israeli advocate — usually in Tel Aviv or Jerusalem — who is experienced in international transactions. Fees are not regulated but typically fall between 0.5% and 1.5% of the purchase price plus VAT (17%).
For pre-sale purchases, the buyer's lawyer's role is particularly important. They must review the developer's bank guarantee documentation, verify the developer's license and building permits, review the sales contract (chozeh mechirah) for compliance with the Consumer Protection Law, and register the buyer's rights in the official land registry (tabu or minhal).
DDG coordinates with a panel of approved Israeli legal firms with international client experience. We provide introductions but recommend all DDG Members retain their own independent legal counsel.
Municipal and Registration Fees
Beyond the national purchase tax, several smaller fees apply at the municipal and registry level:
- Tabu registration (Lishkat HaRasham): A fixed administrative fee of approximately ₪600 for registration of ownership in the Israel Land Registry.
- Municipal fees (arnona equivalents): Not a transaction cost, but buyers should budget for the first year's municipal property tax (arnona), which varies significantly by city and apartment size. In Tel Aviv, arnona on a 100sqm apartment typically runs ₪6,000–₪12,000 per year.
- HOA (va'ad bayit) set-up: Many new buildings require an initial deposit to the building committee. This ranges from ₪3,000 to ₪15,000 for luxury projects.
FX Considerations for Foreign Currency Buyers
Most DDG Members transact in USD, EUR, or GBP and must convert into New Israeli Shekels (NIS/ILS) to meet payment obligations. The Israel Tax Authority assesses mas rechisha in shekels based on the declared contract price, which in mixed-currency contracts is usually denominated in NIS. Banks and licensed currency brokers charge conversion fees of 0.3–1.5% depending on the amount and relationship — this is a real cost that should be factored into acquisition budgeting.
For large transactions, engaging a specialist currency broker (such as those offering forward contracts to lock in the exchange rate at the time of signing) can meaningfully reduce currency risk between signing and payment milestones.
What DDG Handles for You
DDG coordinates the full acquisition process for international DDG Members, including:
- Pre-purchase tax estimation and acquisition cost modelling specific to each property
- Introduction to qualified Israeli advocates with international transaction experience
- Coordination with developers on contract terms, payment schedules, and bank guarantee verification
- Guidance on Israeli bank account opening for non-residents
- Post-signing support on tax filing deadlines and payment logistics
Every transaction is different. The figures above are illustrative and should not be used as the sole basis for financial planning. DDG advisors provide property-specific cost modelling as part of our standard onboarding process.
Disclaimer: This article provides general information about Israeli purchase tax as of 2026. Tax rates and brackets are subject to change. This is not legal or tax advice. DDG Members should obtain independent legal and tax advice from qualified Israeli professionals before completing any property transaction.