2026 Purchase Tax Brackets for Investment Apartments
In 2026, anyone purchasing an additional apartment pays purchase tax according to just two brackets: 8% on the portion up to NIS 6,055,070, and 10% on every shekel beyond that.
This is a temporary provision that has been extended repeatedly through end of 2026. Before it, the first bracket was only 5%.
- Apartment worth NIS 1.6M: Tax of NIS 128,000 (8%)
- Apartment worth NIS 2M: Tax of NIS 160,000 (8%)
- Apartment worth NIS 2.5M: Tax of NIS 200,000 (8%)
- Apartment worth NIS 3M: Tax of NIS 240,000 (8%)
- Apartment worth NIS 7M: Tax of approximately NIS 578,899
The Bracket Freeze
The Knesset approved a complete freeze on CPI-linking of purchase tax brackets from 2025-2027.
If apartment prices rise but brackets stay fixed, more of the value falls into higher brackets.
- Freeze from 2025 through end of 2027
- Sole-apartment buyers are more affected
- Investors buying above NIS 6M enter 10% bracket sooner
Legal Strategies for Saving on Purchase Tax
Israeli law contains several mechanisms enabling significant savings with proper planning.
The one-third rule: holding up to one-third of an additional apartment qualifies as sole-apartment owner.
Home improver mechanism: buy new, sell old within 24 months for sole-apartment rates.
- One-third rule: Up to 1/3 ownership does not classify as multi-apartment
- Tax-free transfer to family: only 1/3 of regular purchase tax
- Home improvers: 24 months to sell old apartment
- Purchase in adult childs name: 0% up to exemption ceiling
- Disability exemption: 0.5% only (twice in lifetime)
- New immigrants: 0.5% up to NIS 1,988,090 for up to 7 years
New Surtax on Capital Gains from 2026
Capital gains from non-exempt apartment sales now included in surtax calculation.
Exemption: apartments valued up to NIS 5.385 million not subject to surtax.
- Surtax increased from 3% to 5%
- From 2026: investment apartment gains included
- Exemption for apartments up to NIS 5.385M
- Expected to generate NIS 500M annually