blog.cat.realestate6 min read8/14/2026

Bought an Apartment Before Selling the Old One: When Purchase Tax Will Be Refunded in Israel

Owning two apartments for several months does not always turn a buyer into an investor for tax purposes. If the new home replaces the sole apartment and the old one is sold within the prescribed period, the preferential purchase tax brackets may apply—including by requesting a refund of an amount already overpaid.

Numbers and facts

•18 months—for purchases from 01.06.2023 through 31.05.2025
•24 months—for purchases from 01.06.2025
•1 year from handover of the apartment by the developer—if that date is later
•30 days—the deadline for filing the transaction declaration
•Up to ₪1,978,745—a 0% rate for a sole apartment
•3 months—the special extension of deadlines in 2026

Why You May Own Two Apartments on the Purchase Date

The Real Estate Taxation Law of 1963 provides a special arrangement for those upgrading their housing: a new apartment may be purchased before the previous one is sold. To qualify for the purchase tax brackets applicable to a sole apartment, the buyer must be an individual who is an Israeli resident, and the previous apartment must have been the buyer’s only home before the new purchase. The benefit is retained only if the old apartment is sold within the prescribed period and the other statutory requirements are met. In other words, what matters is not only the number of apartments owned on the transaction date, but also whether the new apartment replaced the old one and when the old apartment was actually sold.

The Deadline Depends on the Purchase Date

For a replacement apartment purchased from June 1, 2023, through May 31, 2025, the old apartment must be sold within 18 months from the date the new one is purchased. If the new apartment is purchased on or after June 1, 2025, the standard period is 24 months. For purchase tax purposes, these periods are prescribed in Section 9(ג1ג)(2)(ב) of the Real Estate Taxation Law; the related rule concerning sole-apartment status for exemption from capital gains tax is set out in Section 49ג(1). A mistake that costs buyers dearly is calculating the period from the move, receipt of the mortgage, or listing the old apartment for sale: the period usually runs from the date the replacement apartment is acquired.

Apartment Purchased from a Developer: An Additional Starting Point Applies

When an apartment is purchased from a developer, purchase tax is calculated using either one year from the date the apartment is handed over or the general 18- or 24-month period—whichever date is later. This matters when the agreement is signed long before the keys are received: the period does not always end 18 or 24 months after the agreement is signed. However, the handover must be supported by documents, not merely by the actual start of occupancy. The purchase agreement, handover notice, and apartment acceptance protocol should therefore be kept together.

Special Extension of Deadlines in 2026

On March 25, 2026, the Knesset approved a temporary three-month extension in connection with Operation “Lion’s Roar.” If the prescribed period overlaps by even one day with the interval from February 28 through May 31, 2026, the deadline is moved to August 31, 2026, or three months after the original date, whichever is later. The extension applies to the period during which those upgrading their housing may retain sole-apartment-owner status for calculating purchase tax and capital gains tax. It cannot automatically be added to every transaction: first, it is necessary to check whether the specific deadline falls within the designated temporary interval.

How to Arrange Recalculation and a Refund

A real estate purchase must be reported to the Tax Authority within 30 days: the buyer’s obligation is established by Section 73(ג) of the Real Estate Taxation Law. The declaration states the transaction value, the purchase tax calculation, and entitlement to the benefit; where the buyer is represented, the declaration is filed online through an attorney, while unrepresented buyers use the government electronic service. If the tax was initially calculated or paid as for an additional apartment, after the old apartment is sold on time, the buyer should apply to the Real Estate Taxation division to request a revised calculation and a refund of the overpayment. It is advisable to attach the agreements for the purchase of the new apartment and sale of the old one, the tax assessment notice, proof of payment, and, for a purchase from a developer, the handover documents. A refund does not occur merely because the old apartment was registered in the new owner’s name: the Tax Authority must be notified of the changed circumstances.

FAQ

Can the tax be refunded if the old apartment was sold after the new one was purchased?

Yes, if the new apartment meets the conditions for replacement housing and the old one was sold within the period applicable to the transaction. If the tax was already paid under a less favorable calculation, a recalculation and refund of the overpayment must be requested from the Tax Authority, with documents for both transactions attached.

How much time is allowed to sell the old apartment?

For a new apartment purchased from June 1, 2023, through May 31, 2025, the period is 18 months. For purchases on or after June 1, 2025, it is 24 months; when purchasing from a developer, a later deadline equal to one year from the handover date may apply.

From which date is the period calculated—from the agreement or receipt of the keys?

As a general rule, the period is calculated from the date the replacement apartment is acquired. A separate rule applies to an apartment purchased from a developer: the general period is compared with one year after handover, and the later date applies.

Must buyers wait until the old apartment is sold before reporting the purchase of the new one?

No. The buyer must file a declaration concerning the new transaction within 30 days and state the tax calculation and claimed benefit. The sale of the old apartment and the subsequent request for recalculation cannot replace a timely initial declaration.

Which purchase tax brackets apply to a sole apartment?

For the period from January 16, 2025, through January 15, 2028, the portion of the value up to ₪1,978,745 is tax-exempt. The brackets of 3.5%, 5%, 8%, and 10% then apply within the limits published by the Tax Authority; the exact result can be checked in the official simulator using the transaction date and value.

What to do next

First, determine the acquisition date of the new apartment and calculate the final day for selling the old one, separately checking the developer rule and the temporary 2026 extension. Then compare the agreements, tax assessment, and payment documents, and submit a request to the Real Estate Taxation division if the tax was calculated as for an additional apartment. If information pages conflict with the law currently in force, the statutory provisions take precedence.