Purchase Tax on a Second Apartment
Buyers of a second residential property pay a significantly higher purchase tax than first-home buyers. As of 2024, rates for second-apartment buyers start at 8% on the full value and rise to 10% above certain thresholds. No exemption bracket applies — the tax runs from the first shekel.
Capital Gains Tax When Selling
Selling a second apartment triggers capital gains tax (Mas Shevach) at a linear rate of 25%. The gain is calculated from the original purchase price (indexed for inflation) to the sale price. Some exemptions may apply if conditions are met — for example, if the owner holds only one other apartment and qualifies under the single-apartment exemption rules.
Annual Surcharge (Ma'am Addition)
Owners of more than one residential apartment pay an annual property surcharge on each additional unit. The rate is calculated based on the apartment's assessed value. This annual cost must be factored into the overall economics of holding a second property.
How much purchase tax do I pay on a second apartment in Israel?
Second-apartment buyers in Israel pay purchase tax starting at 8% with no exempt bracket — the tax applies from the first shekel. The rate rises to 10% above higher thresholds. This is significantly more than first-home buyers, who benefit from a tiered exemption structure. Exact rates are updated periodically by regulation.
