Purchase Tax for New Immigrants — What You'll Actually Pay in 2026
Purchase tax (mas rechisha) is the first tax every apartment buyer encounters in Israel. It's calculated as a percentage of the purchase price and must be paid to the Tax Authority within 60 days of signing the contract. New immigrants enjoy significantly reduced tax brackets — but only if they meet the eligibility conditions.
Since August 2024, a significant regulatory change took effect: the benefit now applies only to a single dwelling, not investment properties. An immigrant who already owns an apartment in Israel (or more than one-third of one) cannot benefit from the reduced rates. This change closed a loophole that previously allowed olim to purchase luxury apartments at minimal tax rates.
| Buyer Type | Up to ₪1,978,745 | ₪1,978,745–₪6,055,070 | Above ₪6,055,070 |
|---|---|---|---|
| New Immigrant (single dwelling) | 0% | 0.5% | 8% (same as regular Israeli) |
| Israeli — First Apartment | 0% | 3.5% / 5% | 8% / 10% |
| Israeli — Additional Property | 8% | 8% | 10% |
Practical example: A new immigrant buying a 4-room apartment in Kiryat Ono for ₪3,000,000 pays 0% on the first ₪1,978,745 and 0.5% on the remainder (₪1,021,255) — a total of approximately ₪5,106. A regular first-time Israeli buyer pays about ₪45,500 for the same apartment (0% on the first bracket, 3.5% on ~₪368,000, and 5% on ~₪653,000). A second-property buyer? Around ₪240,000.
- The benefit is available once only — for one residential property and one business property
- Eligibility period: 1 year before aliya through 7 years after (military/national service time excluded)
- Submit a partial exemption request to the regional property taxation office with your oleh certificate
- Properties valued above ₪20.18 million are not eligible for the benefit
Mortgages for Olim — Government-Backed Loans, Rates and Special Conditions
Beyond tax benefits, new immigrants qualify for a government-backed eligibility loan (halvaat zkaut) from the Ministry of Construction and Housing, offering fixed, subsidized interest rates typically below market rates. The loan amount is determined by a points-based system considering years in Israel, family status, military service, and apartment location.
Olim receive a unique points bonus: minimum 1,700 points for families in the first year, rising to 1,800 from the second year. Immigrants over 45 receive an additional 400-point bonus. Loan amounts typically range from ₪100,000 to ₪200,000, with repayment terms of up to 25 years.
As of March 2026, the Bank of Israel interest rate stands at 4.0%. Index-linked mortgage rates for long terms range around 3.3%-3.6%. The mortgage market is competitive, so it's strongly recommended to get offers from 3-4 banks before signing.
| Parameter | Requirement |
|---|---|
| Minimum equity (first apartment) | 25% of property value |
| Minimum equity (second property) | 50% of property value |
| Maximum monthly payment | Up to 40% of disposable income |
| Eligibility certificate validity | 1 year (renewable) |
| Mortgage benefit eligibility | Up to 10 years from aliya |
- Get your eligibility certificate from any bank with your oleh certificate, ID, and military service confirmation — costs about ₪70
- Conditional grants of ₪40,000–60,000 are available for first-home buyers in peripheral areas
- Olim in their first year may struggle with mortgage approval — banks typically require 3 Israeli salary slips
- Military or national service adds significant points and increases your eligible loan amount
The Apartment Buying Process — Step by Step for New Immigrants
Buying an apartment in Israel is a structured process that typically takes 2-4 months from finding a property to receiving the keys (for resale). For new construction, the timeline is longer as building takes 2-3 years. For olim, the process includes unique steps requiring special attention.
The most common problem we see with immigrants buying property: they don't fully understand the documents and sign things without legal representation that speaks their language. This is an expensive mistake.
The process: First, define a realistic budget including purchase tax, lawyer fees (0.5%-1.5% + VAT), brokerage (up to 2% + VAT), appraisal, and inspections. Second, visit a bank for mortgage pre-approval and an eligibility certificate. Third, search for a suitable property. Fourth, have your lawyer review the property. Fifth, negotiate and sign the contract. Sixth, submit your mortgage application and purchase tax forms. Seventh, receive the keys and register with the Land Registry (Tabu).
- Total budget = property price + 5%-7% additional costs (tax, lawyer, brokerage, appraisal, initial renovations)
- Hire a lawyer who speaks your language — essential for immigrants, not an unnecessary expense
- Check the Tabu extract before signing — it reveals liens, attachments, and third-party rights
- For new construction, verify the Sale Law guarantee — your protection if the developer runs into trouble
Apartment Prices in the Ono Valley — What a First Home Costs for Olim
The Ono Valley offers a wide range of prices — from relatively accessible apartments in Or Yehuda to higher-priced properties in Ganei Tikva and Kiryat Ono's newer neighborhoods.
| City | 3-Room Apartment | 4-Room Apartment | Average Price/sqm |
|---|---|---|---|
| Kiryat Ono | ₪2,200,000–2,800,000 | ₪2,700,000–3,400,000 | ₪30,000–32,000 |
| Ganei Tikva | ₪2,500,000–3,100,000 | ₪3,000,000–3,500,000 | ₪32,000–35,000 |
| Yehud Monosson | ₪2,000,000–2,600,000 | ₪2,500,000–3,200,000 | ~₪30,000 |
| Or Yehuda | ₪1,600,000–2,200,000 | ₪2,000,000–2,700,000 | ₪26,000–27,000 |
| Givat Shmuel | ₪2,400,000–3,000,000 | ₪3,000,000–3,600,000 | ₪31,000–33,000 |
Or Yehuda offers entry prices 15%-25% lower than Kiryat Ono and Ganei Tikva. It's worth getting a property valuation from a local agent or licensed appraiser to map apartments matching your budget and needs.
- Or Yehuda — accessible entry point for olim with a ₪1.6–2.2M budget
- Kiryat Ono — highly rated schools, established neighborhoods
- Ganei Tikva — suburban-rural character with private houses and garden apartments — ideal for families
- Yehud Monosson — proximity to Ben Gurion Airport, new projects, and competitive pricing
Additional Benefits Olim Often Forget to Claim
Purchase tax benefits are the biggest, but they're not the only ones.
Absorption Basket: A universal payment with no income test. Singles receive approximately ₪20,500, couples ₪39,000, and families with two children about ₪61,000.
Municipal Tax Discount: Up to 90% off arnona for apartments up to 100 sqm, for 12 months.
National Insurance Exemption: In the first year, olim are exempt from National Insurance and health insurance payments. Note: from January 2026, the reporting exemption for foreign assets was eliminated for new immigrants and veteran returning residents.
- Absorption basket: up to ₪61,000 for families
- 90% arnona discount: valid for 12 months within 2 years of aliya
- National Insurance exemption: first year
- Eligible for Dira BeHanacha (discounted housing lottery): olim who haven't owned property in the last 6 years can register
Common Mistakes Olim Make When Buying — and How to Avoid Them
After years of guiding transactions in the Ono Valley, we see several recurring mistakes among new immigrants.
Mistake #1: Not claiming all available benefits. If 7 years have passed since aliya — the benefit expires.
Mistake #2: Signing a contract without a lawyer who speaks your language. Lawyer fees (₪10,000–30,000) are minimal relative to the transaction amount.
Mistake #3: Relying only on what you see without checking documents.
Mistake #4: Not comparing mortgage offers. Get offers from at least 3-4 banks.
- Plan your purchase within the 7-year window from aliya — benefits expire after this period
- Hire a lawyer who speaks your language
- Check Tabu extract, building plans, and permits
- Compare mortgage offers from 3-4 banks before signing