— Pillar guide · Tax

Mas Rechisha: Israel's property purchase tax

Mas Rechisha (מס רכישה) is the Israeli property purchase tax. It is paid by the buyer on every real-estate transaction and is, for foreign buyers or investors, the single largest cost after the price of the property itself.

Its progressive scale depends on your status (Israeli resident first-time buyer, second-home buyer, foreign resident, or olé hadash) and on the value of the asset. Misjudge it and you face a surprise of 100,000 to 400,000 ₪ on top of your budget.

This guide collects the 2026 brackets, calculation rules, payment deadlines, exemptions and the specific mistakes foreign buyers most often make.

Mas Rechisha: definition and principle

Mas Rechisha is governed by the 1963 Real Estate Taxation Law (Hok Misuy Mekarkein). It applies to any acquisition of Israeli real estate: apartment, house, land, building rights, or shares in a real-estate company.

It is calculated on the declared purchase price (Shovi HaRechisha) — or, if the tax authority deems the price understated, on the market value it reassesses itself. Manipulating the declared price is a criminal offence.

The scale is progressive in brackets, like an income tax. The buyer's status determines which scale applies — and it is the status, not the property, that radically changes the cost.

Resident bracket — first-time buyer (2026)

For an Israeli resident whose property is their only home (dira yechida), the 2026 scale starts at 0% up to around 1,978,000 ₪, then 3.5% up to 2,347,000 ₪, 5% up to 6,055,000 ₪, 8% up to 20,183,000 ₪, and 10% above.

A 2,500,000 ₪ apartment for a resident first-time buyer therefore generates about 20,600 ₪ of Mas Rechisha — extremely low compared to other statuses. This is the single largest fiscal advantage of resident status.

To qualify, the property must become your main residence within 24 months, and you must not own more than 33% of another property at signing.

Second-home or resident investor bracket

For an Israeli resident buying a second property (rental investment, secondary home), the scale starts immediately at 8% on the first 6,055,000 ₪, then 10% above.

A resident investor buying at 2,500,000 ₪ therefore pays 200,000 ₪ of Mas Rechisha — 10× more than a first-time buyer. This is deliberate: the State protects the primary-housing market.

Legal hack: if you sell your existing main residence within 24 months of buying the second, you can apply for requalification of the second property as dira yechida and recover the tax difference — a little-known mechanism that changes everything for buyers in transition.

Foreign-resident and olé hadash brackets

For a foreign resident (toshav hutz), the scale is identical to the resident second-home scale: 8% up to 6,055,000 ₪, then 10%. There is no preferential first bracket.

Olé hadash (new immigrant) status opens a derogatory scale for 7 years from aliyah: 0.5% up to about 1,988,000 ₪, then 5% above — usable once for a main residence or commercial unit.

Important: olé qualification is tied to the date of aliyah, not the date of purchase. Many French-speaking olim lose this benefit by buying too soon after administrative aliyah or via the wrong structure (e.g. in a non-olé parent's name).

Calculation, filing and payment

The filing (mahsav mas rechisha) must be submitted to Mas Shevach within 30 days of signing the purchase contract (Heskem Mekher). Late filings trigger penalties.

Actual payment is typically due within 60 days of filing. Without payment, no transfer at the Tabu is possible — the property remains legally registered under the seller.

Exact calculation depends on value, status, co-buyers, and structure (individual vs company). A few-thousand-shekel error is common: your lawyer must produce a certified mahsav before signature.

Frequently asked questions — Mas Rechisha

What is the Mas Rechisha rate for a foreigner buying in Israel?+

Without active olé status, you are treated as foreign resident: 8% up to roughly 6,055,000 ₪, then 10%. On a 2M ₪ apartment, expect 160,000 ₪ of tax.

Does olé hadash keep the benefit for life?+

No. The preferential scale is usable once and only within 7 years of your official aliyah date. After that you revert to the standard resident scale.

Can the mashkanta finance the Mas Rechisha?+

No. Bank Israel forbids the mashkanta from covering acquisition costs. Mas Rechisha must be paid from own funds, on top of the down payment on the price.

What if I understate the price in the contract?+

Mas Shevach can unilaterally reassess and demand tax on the real value, plus penalties and interest. Criminally, it is aggravated tax fraud. Never accept this practice.

Are full exemptions available?+

A few cases: inheritance, gifts between spouses, certain internal transfers in family companies, and the olé bracket on the first tranche (~0.5%). All require validation by your tax lawyer.

Summary: master your Mas Rechisha

Mas Rechisha is never a swing variable: it is mechanical, predictable, and must be budgeted BEFORE signing a reservation contract. Poor anticipation can derail financing.

Best practice: have your lawyer produce a mahsav as soon as a property is identified, verify your status (resident, second home, olé, foreign), and arbitrate the acquisition structure (individual, joint, company) accordingly.

For a foreign buyer, the tax-lawyer + mashkanta-broker pair is as important as the property choice itself. Ask us for an independent fiscal analysis before you sign.

— Before you sign

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