Israel Mas Rechisha (Property Purchase Tax) Calculator 2025
Calculate Mas Rechisha (property purchase tax) in Israel for 2025. Covers first-home buyer brackets and investor rates. 2025 thresholds: 0% up to 1,978,745 ILS, 3.5% up to 2,347,040 ILS, then 5%.
Calculate Mas Rechisha (property purchase tax) in Israel for 2025. Select first home or investor to apply the correct bracket structure.
Mas Rechisha (purchase tax)
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How Mas Rechisha is calculated in 2025
For first-home buyers, Mas Rechisha is a progressive tax. The first 1,978,745 ILS of the purchase price is tax-free. The portion between 1,978,746 ILS and 2,347,040 ILS is taxed at 3.5 percent. Any portion above 2,347,040 ILS is taxed at 5 percent. Importantly, the 5 percent rate applies only to the amount above the second threshold, not to the entire price. This is why a property at 2,500,000 ILS incurs a much lower tax bill than 5 percent of 2,500,000 ILS would suggest. For investors and second-home buyers, the rate is a flat 8 percent on the full purchase price from the first shekel, with a 10 percent surtax on any portion above 5,525,070 ILS. There is no zero-rate band for investors.
When does the 18-month upgrade rule apply?
An owner who already has one property but intends to sell it and use the proceeds to buy a replacement home faces a timing challenge. If they buy first and sell later, they technically own two properties at the point of purchase and will be classified as an investor, facing the 8 percent rate. The Israel Tax Authority provides a relief rule: if the buyer sells their existing property within 18 months of buying the new one, they can apply for a refund of the excess Mas Rechisha paid (the difference between the investor rate and the first-home rate). The refund must be claimed formally. This rule is widely used by upgraders but requires careful cash-flow management since the higher tax must be paid upfront and then reclaimed.
Mas Rechisha versus other purchase costs
Mas Rechisha is one of several transaction costs a buyer faces in Israel. Legal fees for the purchase typically run 0.5 to 1 percent of the property price. Real estate agent commission, when the buyer uses an agent, is typically 1 to 2 percent plus VAT. Mortgage origination fees and the mandatory property appraisal add further costs. Registration fees at the Land Registry (Tabu) are relatively small. For an investor paying 8 percent Mas Rechisha on a 2,000,000 ILS property, the tax alone (160,000 ILS) substantially exceeds all other transaction costs combined. This high entry tax is one reason investment property transactions slowed during the 2022 to 2024 rate-tightening period, when the carrying cost of a leveraged investment also rose sharply.
Frequently asked questions
What is Mas Rechisha (property purchase tax) in Israel in 2025?
Mas Rechisha is the Israeli stamp duty equivalent, a tax paid by the buyer on the purchase of residential property. The tax is a mandatory payment to the Israel Tax Authority and must be paid within 50 days of signing the purchase agreement. Failure to pay on time attracts interest and late-payment penalties. The rate and bracket structure differ significantly depending on whether the buyer is purchasing their only residential property (first home or owner-occupier replacing their only home) or whether they already own other residential property (investor or second-home buyer). For 2025, the thresholds are indexed annually based on the housing price index. The amounts stated in this calculator reflect the 2025 statutory brackets as published by the Israel Tax Authority.
What are the Mas Rechisha rates for a first-home buyer in Israel in 2025?
For a buyer purchasing their only residential property (first home), the 2025 Mas Rechisha brackets are: 0 percent on the first 1,978,745 ILS of the purchase price, 3.5 percent on the portion from 1,978,746 ILS to 2,347,040 ILS, and 5 percent on the portion above 2,347,040 ILS. This is a progressive structure where only the income in each band is taxed at that band’s rate. A buyer purchasing a property for 2,000,000 ILS as their only home would pay zero on the first 1,978,745 ILS and 3.5 percent on the remaining 21,255 ILS, resulting in a Mas Rechisha bill of approximately 744 ILS. The same 2,000,000 ILS property purchased by an investor would be taxed at 8 percent on the full amount, costing 160,000 ILS. This large difference incentivises owner-occupier purchases but can be exploited by buyers who formally sell their existing property before buying a new one.
What is the Mas Rechisha rate for investors and second-home buyers in Israel in 2025?
Buyers who already own a residential property anywhere in Israel and are purchasing an additional one are classified as investors or second-home buyers for Mas Rechisha purposes. The standard rate for investors is 8 percent applied from the first shekel of the purchase price with no zero-rate bracket. There is an additional surtax of 10 percent for the portion of the purchase price that exceeds 5,525,070 ILS, making the effective rate on very expensive investment properties even higher. However, an investor who sells their existing property within 18 months of buying a new one may apply retroactively for a reclassification as a single-home buyer, with the excess tax refunded. This 18-month window is commonly used by buyers who are upgrading to a larger home and need time to sell.
Are new immigrants (olim hadashim) exempt from Mas Rechisha in Israel?
New immigrants (olim hadashim) benefit from a reduced Mas Rechisha rate for a period of time after immigration. In 2025, olim who purchase a property within 7 years of immigration pay a reduced fixed rate rather than the standard first-home or investor brackets. The exact reduced rate for olim purchasing their only residential property is capped at a lower level than the general first-home brackets for properties up to a certain price, with a transition to the standard rate above that. The Israel Tax Authority maintains a detailed table of oleh-specific rates. This calculator covers the standard rates for Israeli residents and does not apply the oleh concession. If you are a new immigrant, consult the Tax Authority publication or a licensed tax adviser for the applicable rate in your specific case.