blog.cat.realestate7 min read10/7/2026

Tax on Purchasing an Apartment: The Sole-Residence Benefit and the 30-Day Rule

After signing the contract, the buyer has 30 days to report the transaction and self-assess the purchase tax. An error in the apartment’s status—“sole” or “additional”—can mean a difference of tens or even hundreds of thousands of shekels.

Numbers and facts

•30 days — the deadline for the buyer to file the declaration
•₪1,978,745 — the tax-exempt portion of a sole residence
•3.5% — the next rate in the reduced tax brackets
•8% — the rate on an additional apartment up to ₪6,055,070
•18 or 24 months — the main periods for selling the previous residence

Who Qualifies for the Sole-Apartment Tax Brackets

The reduced tax brackets apply to an individual who is an Israeli resident and for whom the residence being purchased is the only apartment in Israel and in the relevant territory specified by law. The benefit may also apply when upgrading housing: the new apartment is purchased before the old one is sold, but the previous sole residence is then sold within the prescribed period. For apartments purchased from June 1, 2023, through May 31, 2025, the main period was 18 months, while for purchases from June 1, 2025, it is 24 months. When purchasing from a developer, a one-year period related to delivery of the apartment is also taken into account.

How Much Is Paid Under the Reduced Tax Brackets

Under the brackets frozen for 2025–2027, no tax is charged on the first 1,978,745 shekels of the value of a sole apartment. A rate of 3.5% is paid on the portion from 1,978,745 to 2,347,040 shekels, 5% on the next portion up to 6,055,070 shekels, followed by rates of 8% and 10%. The tax is calculated in portions, rather than by applying a single rate to the entire price. For example, at a price of 2,300,000 shekels, the tax under the sole-residence brackets would be approximately 11,244 shekels, whereas an additional apartment of the same value is taxed at 8%, meaning that the tax would be 184,000 shekels.

Why You Cannot Wait for Registration in the Tabu

Under section 73(c) of the Real Estate Taxation Law, the buyer must file a declaration within 30 days from the date of the transaction. It must state the property, the terms of the transaction, the price paid, the amount of tax and how it was calculated, as well as the grounds for an exemption or reduction. The buyer must also report information about the methods of payment in accordance with section 30 of the Law for the Reduction of the Use of Cash. If the parties are represented by an attorney, the attorney files the declaration online; an unrepresented buyer also uses the electronic system, except in approved cases.

The Old Apartment Has Not Yet Been Sold: What Should Be Declared

A buyer replacing a residence is not automatically required to pay tax as if purchasing an additional apartment: the law allows the sole-residence brackets to apply if the previous apartment is subsequently sold on time. However, this intention and the corresponding calculation must already be reflected in the declaration, rather than after the sale period has expired. In 2026, a special three-month extension applies to certain deadlines: if at least one day of the prescribed period falls between February 28 and May 31, 2026, the later of the applicable extended dates applies. For example, in the official clarification, a sale deadline that was originally due to expire on March 1, 2026, was postponed to August 31, 2026.

How to Respond to an Incorrect Tax Assessment

After accepting the declaration, the regional office sends an assessment notice and payment document, while the inspector continues the review. If the apartment was mistakenly reported as an additional apartment or an applicable benefit was not claimed, the matter cannot be left until the sale or registration of rights: the calculation should be checked and correction of the assessment initiated without delay. In Malchior v. Tel Aviv Real Estate Taxation Office, the buyers of an apartment purchased in 2013 asked only in November 2018 for it to be retroactively recognized as their sole apartment under the procedure in section 85 of the law. The tax authority refused, stating that the correction period had already expired in November 2017; the dispute was heard by the Appeals Committee of the Tel Aviv–Jaffa District Court.

FAQ

From which day is the 30-day declaration period counted?

The period is counted from the date of the transaction, not from the delivery of the keys, full payment, or registration in the Tabu. In the declaration, the buyer states their own tax calculation and claims entitlement to the benefit.

Can the new apartment be treated as the sole apartment if the old one has not yet been sold?

Yes, if the new apartment replaces the previous sole residence and the old one is sold within the period prescribed by law. For the relevant purchases, the period is 18 or 24 months, and when purchasing from a developer, a period related to delivery of the apartment is also taken into account.

Is the apartment’s entire value taxed at the highest rate?

No. The progressive brackets apply separately to each portion of the value: first the tax-exempt threshold, then 3.5%, 5%, 8%, and 10% within the corresponding ranges.

What should you do if the tax was calculated as for a second apartment?

The original declaration, the declared status of the residence, and the assessment notice should be reviewed. The materials from the Malchior case show that the procedure under section 85 of the Real Estate Taxation Law is used for corrections, and delay may lead to a dispute over a missed deadline.

What to do next

Immediately after signing the contract, record the final date for filing the declaration, check whether the apartment qualifies as a sole apartment, and calculate the tax using the official simulator. If the old apartment is being retained, separately note the deadline for selling it; upon receiving the tax assessment, compare it with the filed declaration and do not delay correcting any error found.