The linear split — see what's exempt
For properties bought before 2014, only the portion of the gain accrued from 1 January 2014 is taxable. The longer you owned it before 2014, the more is exempt. This illustrator shows the split based on your dates:
The non-resident reality
- Rate: 25% on the real (inflation-adjusted) gain, for individuals.
- Single-home exemption — usually not for you. The exemption many Israeli sellers use is generally unavailable to a non-resident, unless you prove you do not own a residence in your country of residence (a 2014 condition).
- Linear method — yes, for you. Non-residents can use the linear calculation: gain accrued up to 31 Dec 2013 is exempt; only the post-2014 portion is taxed at 25%. For long-held apartments this is a large saving.
- Withholding at closing. The buyer withholds a portion of the price and remits it to the Israel Tax Authority on your account; you reconcile the actual tax in the filing.
- Betterment levy is separate. Any Heitel Hashbacha (50% of value added by a planning decision) is paid to the local committee, not the national tax authority — a different charge from Mas Shevach.
Inherited or gifted property
Selling an apartment you inherited has its own rules — the original owner's purchase date and cost generally carry over to you, which affects the linear split and any exemption. Inheritance and gifts between relatives are not themselves a taxable "sale," but the eventual sale is. Confirm the details for your case.
Selling — with a licensed professional
This is an independent information resource and free illustrator — not a law or tax firm, and it does not represent sellers. The actual Mas Shevach calculation, exemption eligibility, and filing should be handled by a licensed Israeli professional (lawyer / CPA / licensed tax representative). Tell us about your sale and we'll point you in the right direction.
Get pointed to a licensed professionalFrequently asked questions
What is the capital gains tax rate on selling property in Israel?
For individuals, Mas Shevach is 25% on the real, inflation-adjusted gain. The gain is the sale price minus an indexed cost base and deductible expenses (such as purchase tax paid, agent and legal fees, and capital improvements) — not simply sale price minus purchase price.
Can a non-resident get the single-home capital gains exemption?
Usually not in the standard framework. The single-residence exemption that many Israeli sellers use is generally unavailable to a non-resident — unless the seller proves they do not own a home in their country of residence, a condition added in 2014. Many non-residents instead rely on the linear calculation.
What is the linear calculation and does it apply to non-residents?
For property bought before 1 January 2014, the linear method splits the gain by time: the portion accrued up to 31 December 2013 is exempt, and only the portion accrued from 2014 onward is taxed at 25%. It is available to non-residents and can substantially reduce tax on long-held apartments.
How is the tax collected when I sell?
The buyer withholds a portion of the purchase price at closing and remits it to the Israel Tax Authority on the seller's account. The final tax is determined in the Mas Shevach filing, and any difference is refunded or paid.
Is Mas Shevach the same as the betterment levy?
No. Mas Shevach (capital gains tax) is a national tax on your gain. Heitel Hashbacha (betterment levy) is a separate charge — 50% of the value a planning decision added to the property — paid to the local planning committee. Both can arise on a sale but are calculated and paid separately.