Real Estate Purchase Tax Slashed

New residential buildings going up in the central Israeli town of Be’er Yaakov. (Flash90)

The Knesset has passed a measure to slash the purchase tax on investment properties from eight percent down to its former level of five percent, according to Globes.

The tax reduction went through as part of the latest aid program for businesses and individuals suffering from the economic crisis precipitated by pandemic shutdowns.

Finance Minister Yisrael Katz backed the bill which seeks to attract investors back to the local real estate market, despite critics who say it will inflate home prices, thereby harming the less well-off.

According to the new purchase tax rates, homebuyers, regardless of the number of homes they own, will pay 5 percent purchase tax on the first NIS 1,292,280 on the price of a property; 6 percent between NIS 1,292,280 and NIS 3,876,835; and 7 percent between NIS 3,876,835 and NIS 5,338,290. From there to NIS 17,794,305, the purchase tax rate will be 8 percent and above that 10 percent.