January 18, 2016
Certain updates for 2016 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, 2016 until January 15, 2017, for Israeli residents purchasing their only apartment in Israel:
|
Apartment Value |
Tax Rate |
|
Up to NIS 1,600,175 |
0% |
|
From NIS 1,600,175 to NIS 1,898,005 |
3.5% |
|
From NIS 1,898,005 to NIS 4,896,615 |
5% |
|
From NIS 4,896,615 to NIS 16,322,055 |
8% |
|
Over NIS 16,322,055 |
10% |
2. 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 January 1, 2016 and until January 15, 2017, 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 4,896,615 |
8% |
|
Over NIS 4,896,615 |
10% |
3. 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, 2016 to January 15, 2017 will be as follows:
|
Property Value |
Tax Rate |
|
Up to NIS 1,734,225 |
0.5% |
|
Over NIS 1,734,225 |
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 and limited to certain sums. The updated rates as of January 1, 2016 and until December 31, 2016 are:
1. The combined value of the two apartments sold is NIS 2,004,000; and
2. The maximum value of the apartments is NIS 3,334,000.
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, 2017:
1. Failure to submit a statement: NIS 280.
2. 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.