Real Estate Investment in Bik'at Ono 2026 — The Real Net Return After Taxes and Costs

Gross vs. Net Yield: Why the Gap Matters

When someone pitches you a real estate investment, the first number they show is always the gross yield: annual rent divided by purchase price. For a 3-room apartment in Kiryat Ono priced at ₪2.2M and rented at ₪6,500/month, that's 3.55% — a figure that sounds reasonable, especially compared to current savings account rates.

The problem is that gross yield only measures rent against the listed price, excluding every expense: the purchase tax you pay on signing day, the building management fee, the insurance, the month the apartment sits empty between tenants, and the tax you owe on rental income. When you add all of these, the real number is significantly lower.

Acquisition Costs: The Expenses That Hit on Day One

For a 3-room apartment at ₪2.2M in Kiryat Ono, the purchase tax for a second apartment (8%) comes to ₪176,000 — paid within 60 days of signing and non-refundable. These rates are in effect from January 16, 2025 through January 15, 2028, updated annually by the Israel Tax Authority.

Add a real estate lawyer (approximately ₪20,000–25,000), brokerage commission (2%+VAT = approximately ₪50,000–55,000), a building inspection (₪2,000–3,000), and title registration fees (₪2,000–3,000) — and you're looking at acquisition overhead of ₪250,000–261,000. That's roughly 11.4%–11.9% on top of the purchase price.

Annual Running Costs: What Arrives Every Year

After purchase, the annual cost stream begins. Some expenses are fixed, others variable — but all are real. Building management fees in Kiryat Ono average ₪300–600/month (₪3,600–7,200 annually) depending on building services. Building insurance runs ₪1,500–2,500 per year.

Then there's the variable cost: maintenance and repairs. A new apartment from a developer like the ONO ONE project will demand very little in early years. A resale apartment from the 1980s or 1990s in Kiryat Ono's older neighborhoods may need painting, bathroom renovation, water heater replacement, or plumbing repairs — averaging ₪8,000–15,000 per year.

Rental Income Tax in Israel: Three Tracks to Know

Rental income is taxable in Israel — but three different tax tracks give landlords meaningful flexibility. The right choice can affect net returns by thousands of shekels annually, and you can choose a different track each tax year.

Track 1 — Full exemption: If monthly rent doesn't exceed ₪5,654 (2026 threshold), there's no tax at all. For most Bik'at Ono apartments renting at ₪6,500+, this exemption is only partially applicable. Track 2 — 10% flat rate: A simple 10% tax on all rental income, no deductions. For most Bik'at Ono landlords, this is the most practical option. On ₪78,000 annual rent: tax = ₪7,800. Track 3 — Marginal tax rate: Allows deducting recognized expenses (mortgage interest, depreciation at 2%/year, maintenance costs). Can be advantageous with a large mortgage and significant annual expenses.

Three Real Scenarios: Kiryat Ono, Or Yehuda, and Ganei Tikva

To make the numbers practical, we built three example scenarios based on recent transaction prices and current rental market rates in each city. All assumptions are flagged — these figures are directional guidance, not a precise forecast for any specific property.

What stands out: the differences between the three cities are small — all cluster between 1.6% and 1.7% net yield. Or Yehuda shows a slightly higher gross yield due to lower purchase prices, but the absolute rental income is also lower. Ganei Tikva's 4-room apartment generates higher gross income but requires significantly more capital. In practical terms, none of these is a dramatically better deal than the others on yield alone.

Important note: net income calculations assume stable rent, one month vacancy per year, ₪22,000–25,000 in annual running costs, and 10% rental income tax. Any change to these assumptions will change the yield. Run these numbers yourself for the specific property you're evaluating — real numbers always beat averages. Browse available properties on our listings page, or contact Shmuel for a property-specific assessment.

The 10-Year Picture: Adding Capital Appreciation

A net rental yield of 1.7% looks unimpressive when 10-year Israeli government bonds offer around 4–4.5%. But real estate investment in Bik'at Ono isn't primarily a rental yield play — it's largely a bet on medium-to-long-term capital appreciation, with rental income as a cash-flow cushion that offsets part of the mortgage payment.

Historically, apartment prices in Bik'at Ono have appreciated at 5–7% per year over decade-long periods. That figure was shaped by falling interest rates (2012–2022), population growth, and Israel-specific demand factors. The next decade may look different — particularly with the Bank of Israel rate at 4% as of April 2026, which constrains buyer demand compared to the near-zero rate era.

Two tax considerations for long-term planning: First, capital gains tax (mas shevach) applies when selling — for a non-exempt property, the rate is 25% on a linear basis. On a ₪1.38M profit, the tax could be ₪115,000–200,000 depending on holding period and calculation method. Second, the surtax (mas yosef): an additional 3% on passive income above ₪721,560 annually (2026) — generally not relevant for a single apartment, but important for multi-property portfolios.