- Olim Purchase Tax Benefit in Israel – Save Thousands on Real Estate as a New Immigrant
Immigrating to Israel comes with many challenges, but the State of Israel offers a range of financial benefits to help new immigrants (olim) integrate more easily. One of the most valuable benefits is the Olim Purchase Tax Benefit, which can save new immigrants tens or even hundreds of thousands of shekels when buying residential real estate. Understanding the rules, regulations, and planning opportunities is essential to make the most of this benefit.
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Who Is Considered a New Immigrant for the Olim Purchase Tax Benefit?
According to Israeli real estate tax regulations, a new immigrant is anyone who has received an oleh visa or certificate under the Law of Return, or an A1 temporary residency visa ("oleh in potential"). The Olim Purchase Tax Benefit is not limited to buying a home immediately after immigration — it can also be used for a purchase made up to one year before aliyah or up to seven years after
Old vs. New Regulations: What Changed in 2024?
In 2024, significant changes were introduced to the purchase tax rules for new immigrants. The applicable benefit structure depends on the date you made aliyah:
- Immigrants who arrived before August 15, 2024 can choose between the old regulation (Regulation 12) and the new regulation (Regulation 12A).
- Immigrants who arrived after August 15, 2024 are subject only to the new arrangement (Regulation 12A).
Key Features of the Olim Purchase Tax Benefit
The Old Regulation (Aliyah Before 15.8.2024):
- Reduced purchase tax of 0.5% on property value up to ~2 million NIS
- 5% tax on any amount above that
- One-time use: for residential property or business
- Property must be used by the immigrant or close relative
- Can apply to investment property (not limited to first home)
The New Regulation (Aliyah After 15.8.2024):
- Full exemption on property value up to ~2 million NIS
- 0.5% on value between 2–6 million NIS
- 8% on value between 6–20 million NIS
- No benefit above 20 million NIS
- One-time use for a single residential property only (not for investment)
- No requirement to live in the property
Eligibility Highlights and Planning Tips
- One-Time Benefit: Plan your timing and property choice carefully
- Military/National Service: Service time is excluded from the 7-year limit
- Non-Immigrant Spouse: Tax refund possible for spouse's share
- Returning Residents: Eligible for a separate benefit
- Property Use: Under old rules, must be for own use; new rules have no such requirement
2025 Tax Rates: How the Olim Purchase Tax Benefit Compares
| Property Value (NIS) | First Home (Israeli Resident) | New Immigrant (Old Reg.) | New Immigrant (New Reg.) |
|---|---|---|---|
| Up to 1,978,745 | 0% | 0.5% | 0% |
| 1,978,745 – 2,347,040 | 3.5% | 5% | 0.5% |
| 2,347,040 – 6,055,070 | 5% | 5% | 0.5% |
| 6,055,070 – 20,183,565 | 8% | 5% | 8% |
| Above 20,183,565 | 10% | 5% | No Benefit |
Make the Most of the Olim Purchase Tax Benefit
Whether you're planning to buy your first home in Israel or invest in real estate as a new immigrant, knowing how to utilize the Purchase Tax Benefit to Olim can make a huge financial difference. With the right guidance and timing, you can save significantly and avoid costly mistakes.
Planning to buy property in Israel as a new immigrant?
Don’t miss out on the Tax Benefit that could save you thousands.
Click the link here to use our calculator and see how much purchase tax you'll actually need to pay.We also work in close cooperation with experienced real estate lawyers and can help you find the right property in Israel, as well as assist you with all matters related to the property purchase process.
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Planning to buy property in Israel as a new immigrant?
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