{"id":746,"date":"2020-07-22T09:31:39","date_gmt":"2020-07-22T09:31:39","guid":{"rendered":"https:\/\/rk-law.co.il\/english\/\/?p=746"},"modified":"2022-04-06T10:02:25","modified_gmt":"2022-04-06T10:02:25","slug":"benefits-for-a-new-immigrant-to-israel-in-real-estate-transactions-tali-kessler-adv","status":"publish","type":"post","link":"https:\/\/rk-law.co.il\/english\/benefits-for-a-new-immigrant-to-israel-in-real-estate-transactions-tali-kessler-adv\/","title":{"rendered":"Benefits for a new immigrant to Israel in real estate transactions"},"content":{"rendered":"

The “corona era”, which involves a global health and economic crisis, causes many people to consider immigrating to Israel.<\/p>\n

The State of Israel is interested in encouraging immigration. It offers them an “absorption basket” and economic benefits that should help them at the beginning of their journey as new immigrants in Israel.<\/p>\n

In this article, I will address the economic benefits intended for new immigrants in purchasing a real estate property in Israel.<\/p>\n

A new immigrant is entitled to purchase one residential apartment and one property that is used for business, with a purchase tax exemption. The new immigrant has to purchase the property between one year before entering Israel to seven years after entering Israel. It is possible to use the exemption in a purchase of a combined property (which allows both residence and business use) or a\u00a0 purchase of land that will be used for residence or business.<\/p>\n

The exemption for new immigrant confers a benefit in the purchase tax that will be paid on the purchase of the property (the apartment, the business property, or the land):<\/p>\n

For the initial amount up to NIS 1,838,615, the purchase tax is 0.5%, and above this amount, the purchase tax is 5% (the amount of the tax bracket varies annually).<\/p>\n

In some cases (depending on the price of the residential property) the purchase tax according to the exemption for a new immigrant is higher than the applicable purchase tax rates for an Israeli resident who purchases his first apartment:<\/p>\n

For the initial amount up to NIS 1,744,505, the purchase tax is 0%, from this tax bracket up to the amount of NIS 2,069,205, purchase tax is 3.5%, from this tax bracket up to the amount of NIS 5,338,290, the purchase tax is 8% (the amount of the tax brackets varies annually).<\/p>\n

Since it is cheaper, sometimes, to pay purchase tax as an Israeli resident, arises the question: who is considered an Israeli resident and when is a new immigrant considered an Israeli resident?<\/p>\n

An Israeli resident is someone whose center of life is in Israel. You can read about it in this article<\/a>. Also, for the purpose of purchase tax only, the definition of “an Israeli resident” includes those who within two years from the date of purchase of the apartment became Israeli residents (for the first time in their lives) and also those who within two years from the date of purchase of the residential property became a returning resident (after staying a least ten years abroad).<\/p>\n

The new immigrant is entitled to pay purchase tax according to the tax brackets of an Israeli resident if he becomes an Israeli resident, for the first time in his life, within two years after buying his first apartment in Israel. Sometimes it is cheaper than the tax for a new immigrant.<\/p>\n

Another consideration that justifies the use of an exemption for an Israeli resident purchasing a single apartment (rather than the exemption for a new immigrant) is the desire to maintain the exemption of a new immigrant for the future (and use it when purchasing a second apartment). In this context, it is essential to remember that the exemption for a new immigrant can be used only one-time and within a specific time frame.<\/p>\n

The taxation when purchasing real estate in Israel is significant, and therefore, it is worth checking, preparing, and carrying out appropriate planning in advance.<\/p>\n

You are most welcomed to contact us so we could help you prepare and carry out the appropriate tax planning of the transaction.<\/p>\n

Note:<\/b><\/p>\n

This article provides general and preliminary information only and should not be construed in any event as legal counseling and\/or as a substitute for legal counseling in respect of any case and its circumstances.<\/p>\n

The above should not be relied upon without consulting with an Israeli lawyer before taking any action or making any decision. The above is true as of the date of its composition, and its veracity may change from time to time.<\/p>\n

Distribution and\/or duplication and\/or photocopying of this document and\/or part thereof without permission are prohibited.<\/p>\n","protected":false},"excerpt":{"rendered":"

The “corona era”, which involves a global health and economic crisis, causes many people to consider immigrating to Israel.<\/p>\n","protected":false},"author":2,"featured_media":748,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[109,18],"tags":[53,47,111],"class_list":["post-746","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-tax","category-real-estate","tag-foreign-resident","tag-purchase-tax","tag-real-estate"],"acf":[],"yoast_head":"\nBenefits for a new immigrant to Israel in real estate transactions - Rechnitz, Kessler & Co.<\/title>\n<meta name=\"description\" content=\"A new immigrant is entitled to purchase one residential apartment and one property that is used for business, with a purchase tax exemption. 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