Purchase tax exemption on buying homes revised

The Israel Tax Authority reports that it has revised the brackets for purchase tax on residential real estate according to the increase in the Consumer Price Index. The tax-exempt threshold has been raised from NIS 1,696,750 to NIS 1,744,505. If the taxpayer owns another home, 8% tax was levied on the value in excess of NIS 5,194,225 in 2019 and in excess of NIS 5,340,425 in 2020.

As a result of the changes, purchasers of homes who do not own additional homes will be assessed as follows: zero tax up to a value of NIS 1,744,505, 3.5% on value between NIS 1,744,505 and NIS 2,069,205, 5% on value between NIS 2,069,205 and NIS 5,338,290, 8% on value between NIS 5,338,290 and NIS 17,794,305, and 10% on value above NIS 17,794,305.

Purchasers of a home who own an additional home will be assessed 8% tax on value up to NIS 5,340,425 and 10% tax on value over NIS 5,340,425. For example, a person purchasing a single home for NIS 2.2 million will be assessed NIS 17,905 in tax, and a person purchasing an additional home for NIS 6 million will be assessed NIS 493,192 in tax.

There are a number of online calculators for calculating the purchase tax, but the reliability and updating to the new brackets of these websites should be verified.

Published by Globes, Israel business news – en.globes.co.il – on January 19, 2020

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Article source: https://en.globes.co.il/en/article-1001315418#utm_source=RSS