January 2025

When selling a real estate property in Israel, it is crucial to understand the type of property being sold and its associated tax implications. Specifically, there are significant differences between selling a plot and selling an apartment in terms of eligibility for capital gains tax (CGT) exemptions or reduced linear tax calculations. This article outlines these differences and offers tax planning recommendations to prepare for the sale.

When selling a property in Israel, a key question is the amount of capital gains tax (Mas Shevach) the seller will be required to pay. Many are unaware that mortgage interest expenses paid over the years are deductible expenses for calculating capital gains tax and can significantly reduce the tax amount.