June 3, 2015
Certain updates for 2015 have been made to sums pursuant to the Real-Estate Tax Law and Ordinances as detailed below:
Purchase Tax
1. Following are the updated tax brackets, valid from January 16, 2015 until January 15, 2016, for Israeli residents purchasing their only apartment in Israel:
|
Apartment Value |
Tax Rate |
|
Up to NIS 1,568,800 |
0% |
|
From NIS 1,568,800 to NIS 1,860,790 |
3.5% |
|
From NIS 1,860,790 to NIS 4,800,605 |
5% |
|
From NIS 4,800,605 to NIS 16,002,015 |
8% |
|
Over NIS 16,002,015 |
10% |
2. For purchasing an additional residential apartment in Israel for Israeli residents (including foreign residents purchasing an apartment in Israel) the brackets applicable valid from January 16, 2015 until June 30, 2015 are:
|
Apartment Value |
Tax Rate |
|
Up to NIS 1,162,120 |
5% |
|
From NIS 1,162,120 to NIS 3,486,350 |
6% |
|
From NIS 3,486,350 to NIS 4,800,605 |
7% |
|
From NIS 4,800,605 to NIS 16,002,015 |
8% |
|
Over NIS 16,002,015 |
10% |
3. An individual Israeli resident acquiring a residential apartment that is not their only apartment in Israel, (including foreign residents purchasing their only apartment in Israel), as of July 1, 2015 and until January 15, 2016, will be taxed using the following tax brackets (pursuant to the provisions in items 9(c1d)(1) of the Law):
|
Apartment Value |
Tax Rate |
|
Up to NIS 1,126,475 |
3.5% |
|
From NIS 1,126,475 to NIS 4,800,605 |
5% |
|
From NIS 4,800,605 to NIS 16,002,015 |
8% |
|
Over NIS 16,002,015 |
10% |
4. An Oleh (“new immigrant”) purchasing an apartment and meeting the criteria for an Oleh, is entitled to an easement in purchase tax upon purchasing a residential apartment and/or a place of business, for a period starting the year prior to making Aliyah and ending seven years after making Aliyah. The purchase tax rate valid from January 16, 2015 to January 15, 2016 will be as follows:
|
Property Value |
Tax Rate |
|
Up to NIS 1,700,220 |
0.5% |
|
Over NIS 1,700,220 |
5% |
Capital Gain Tax
Article 49e of the Law details a situation in which two small apartments are sold in order to purchase a single larger apartment. In this case, and despite the fact that this involves the sale of two apartments, there is an exemption from capital gain tax under certain conditions, such as a 12 month time limit to purchasing the other apartment, and having the value of the new apartment be at least 75% of the value of the two apartments sold. The exemption in article 49e is limited to certain sums. The updated rates as of January 1, 2015 and until December 31, 2015 are: the combined value of the two apartments sold is NIS 2,022,200 and the maximum value of the apartments is NIS 3,364,000.
Penalty for Failure to Submit a Statement or Notification to the Administration
According to article 94a(a), an individual who has not submitted a statement or notification by the date set in the law will be fined for every two weeks of arrears. The fines were not updated since last year and remain until January 15, 2016:
- Failure to submit a statement: NIS 280.
- Failure to submit a notification: NIS 230.
The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.