Buying Property in Israel as a New Oleh: Reduced Tax, Mortgage, Timing

Who qualifies for the oleh rate

The oleh rate is a relief set out in regulation 12 of the takanot mas rechisha (purchase tax regulations). It does not depend on your original nationality or the country you leave. Four conditions must be met at the same time.

1. Oleh status. You hold a teudat oleh (immigrant certificate) issued by the Ministry of Aliyah and Integration (Misrad HaKlita), or an equivalent status: ezrach oleh (citizen immigrant, born abroad to Israeli parents), katin chozer (returning minor). A toshav chozer (Israeli returning after a long stay abroad) does not qualify.
2. The time window. The purchase is signed between one year before the aliyah date on the teudat oleh and seven years after. The date that counts is the signature of the sale contract (heskem mechira), not the handover of keys or the registration at the Tabu (land registry).
3. The only home. Since the amendment of 15 August 2024, the property must be the buyer’s only home in Israel (dira yechida) and serve as their residence. An oleh who already owns an apartment must sell it within 18 months to keep the rate.
4. The purchase period. The enhanced schedule (0% then 0.5%) applies to contracts signed between 15 August 2024 and 15 January 2028. Before that, and unless extended, after it, the old oleh schedule applies: 0.5% up to about ₪1.98M, then 5%.

One detail that matters: the benefit is used once. An oleh who uses it in year 2 on a studio cannot use it again in year 6 on the family apartment. Keep it for the purchase that deserves it, especially since below ₪1,978,745 the resident schedule already gives 0%.

Oleh, resident, non-resident: the 2026 brackets side by side

Purchase tax is calculated by bracket, like a progressive income tax: each rate applies only to the slice of the price inside its bracket. The thresholds below are frozen until 15 January 2028 by the 2025-2026 Arrangements Law.

How to read it: up to ₪6,055,070, an oleh pays at most 0.5% of the part of the price above ₪1,978,745, a maximum of ₪20,382. Above ₪6,055,070 the oleh schedule rejoins the resident schedule. The full schedule, with the special cases (replacing a home, inheritance, off-plan), is on the mas rechisha 2026 page, and the calculator gives your exact amount.

Worked examples: a 4-room at ₪2.5M, a 5-room at ₪4M

The more expensive the home, the wider the gap with a resident: ₪18,000 at ₪2.5M, ₪85,000 at ₪4M. Against a non-resident the gap is massive from the first shekel. That is why a family whose aliyah is serious plans the purchase around the window rather than the other way round.

Buying before aliyah: pay 8%, then claim it back

Many buyers want to lock in an apartment before they move, especially off-plan, where delivery comes one or two years after signing. Two mechanisms keep the benefit alive.

The retroactive oleh rate. If the contract is signed less than one year before the aliyah date, the purchase falls inside the window. But on signing day you do not yet hold a teudat oleh: the Tax Authority treats you as a non-resident and demands 8%. The practical procedure is this.

1. At signing, the lawyer files the transaction within 30 days and you pay non-resident tax within 60 days (on ₪2.5M, ₪200,000). Some tax offices accept a partial payment against a guarantee when the aliyah file is already open with the Jewish Agency; that is negotiated, not a right.
2. After aliyah, as soon as you receive the teudat oleh and the teudat zehut (ID card), the lawyer files a request to amend the assessment (bakashat tikun shuma) with the land taxation office (misui mekarkein), attaching the teudat oleh, the contract and a single-home declaration.
3. The refund of the difference usually arrives within 2 to 4 months, plus statutory interest and indexation from the payment date. The request can be filed up to four years after the original assessment, but there is no reason to wait.

Requalification as a resident. Separately from oleh status, any non-resident buyer who becomes an Israeli resident within two years of the purchase, and for whom it is the only home, can ask to be taxed at the resident single-home rate. This is the fallback if aliyah happens more than a year after signing: you do not get everything back (on ₪2.5M you drop to ₪20,538, not ₪2,606), but most of it.

Buying after aliyah: the steps in order

Once you have landed, the purchase follows the usual procedure, but a few administrative steps must come before the property search, because the bank and the Tax Authority will ask for them.

• Teudat oleh and teudat zehut. Issued at the airport or within days by Misrad HaKlita and the Ministry of Interior. The aliyah date on them opens the seven-year window.
• Israeli bank account. Essential for the mortgage and for payments to the seller. Banks open an “olim” account on presentation of the teudat oleh, often with reduced fees in the first year. Open it before you start looking.
• Income history. If you are employed in Israel, the bank will want 3 to 6 payslips (tlushei maskoret). If your income stays abroad, it will accept translated foreign documents for one to two years. Either way, gather the last two years of tax returns from your country of origin.
• Israeli tax number. Your teudat zehut number doubles as your tax ID; the lawyer uses it for the purchase tax return.
• A lawyer independent of the seller. As with any purchase in Israel, the lawyer checks the Tabu, drafts the contract and files the tax return. For an oleh, they also make sure the contract records the status and the aliyah date.

An oleh who already has an account, the documents and a bank pre-approval buys on the same timeline as a resident: 2 to 6 months for a second-hand home, depending on the contract’s payment schedule.

The oleh mortgage: up to 75%, with an unusual file

As soon as an oleh is registered (teudat zehut, address in Israel, bank account), banks treat them as a resident: the Bank of Israel directive allows financing of up to 75% of the price for a first and only home, against 50% in practice for a non-resident. On ₪2.5M, that is ₪625,000 less down payment. For a buyer whose aliyah is planned within two years, most banks already grant 70 to 75% on presentation of the aliyah file, sometimes with the drawdown conditional on actual arrival.

What differs from a long-time resident is the file: no Israeli credit history, income often still in dollars, pounds or euros, sometimes a remote job for a foreign employer. The five big banks run “mortgage for olim” programs built for this: foreign income accepted with a 10 to 20% haircut, translated documents, a dedicated adviser in the Jerusalem, Netanya, Raanana and Modiin branches. The rates are market rates (prime 4.75% in November 2026, unlinked fixed 4.8 to 5.5%), with the rule that at least one third of the loan is at a fixed rate. The full conditions, a complete example and the oleh-specific pitfalls are on the mortgage for new olim page; the basics (prime, CPI, tracks) are in the mortgage guide.

Rent first or buy inside the window: the strategy

Seven years is a long time. Nothing forces you to buy in the first six months, and most advisers recommend renting for a year before buying: time to choose the city, learn the neighborhoods, stabilize income and learn to read a listing (gross area, floor, mamad). But three things argue against waiting too long.

The common compromise: rent in the target city, sign an off-plan purchase in year 1 or 2 with a 20/80 payment schedule, and move in at delivery. You get the enhanced rate, the balance is financed once your income is in shekels, and you had time to choose. The trade-offs are those of any off-plan purchase: the balance is indexed to the madad (construction cost index) and deliveries run late. To compare cities and neighborhoods, the Jerusalem and Netanya pages give real prices by neighborhood.

The other oleh benefits, outside housing

Housing is only part of the oleh “basket”, and it should not be confused with the rest. The sal klita (absorption basket) is a cash benefit paid over the first six months by Misrad HaKlita; it is not tied to a purchase and no bank counts it as a down payment. The ten-year tax exemption on foreign-source income and capital gains concerns income tax, not purchase tax; it changes nothing about mas rechisha but weighs on whether to keep or sell a property abroad. Customs reductions on imported furniture and appliances, free ulpan and rent assistance (siyua beskhar dira) after the sal klita complete the package. For the general tax side of aliyah (tax residency, the exemption, treaties with the US and UK), see Shekel Guide.

There used to be “state mortgages” for olim (subsidized loans from the Housing Ministry, zakaut). Today the amounts, a few tens of thousands of shekels, are marginal next to the price of an apartment; request the entitlement certificate (teudat zakaut) but do not build a financing plan on it.

The costly mistakes

• Buying through a company. The oleh rate is personal. A company, even 100% owned by the oleh, pays 8% from the first shekel (additional home) and also loses access to 75% financing. On ₪2.5M, the mistake costs close to ₪197,394.
• Two buyers, one oleh. If a non-oleh spouse or parent is on the contract, their share is taxed at their own rate: resident single home if they live in Israel, 8% if they are a non-resident. A 50/50 purchase with a non-resident spouse on ₪2.5M costs about ₪101,000 in tax instead of ₪2,606. The lawyer can propose a different split, but the bank also looks at who the borrowers are: settle it before signing.
• Signing more than a year before aliyah. At 13 months, the oleh rate is lost; what remains is requalification as a resident within two years, which is less generous. If aliyah is in progress, align the contract date, not the delivery date.
• Spending the benefit on a small home. Below ₪1,978,745 the resident schedule already gives 0%. Claiming the oleh rate on that home uses it up for nothing.
• Believing a developer’s “olim discount”. Some kablanim (developers) advertise “olim prices” or promise to “cover the purchase tax”. The tax is computed by the Tax Authority on your status, not by the developer; a price discount is a discount, to be negotiated like any other and compared with the neighborhood’s price per m². Have the developer’s contract reviewed by your own lawyer, not the developer’s.
• Forgetting the country you leave. A US person keeps reporting worldwide income and may face US tax on a future sale; a UK resident who buys before leaving has UK reporting to consider. Neither the bank nor the developer will tell you.

For the full budget beyond the price (lawyer 0.5 to 1% + VAT, agent 2% + VAT, broker, appraisal, bank fees), see every fee of a purchase; to buy remotely while aliyah is being prepared, buying from abroad.

What changes in 2027 and 2028

Three dates to watch. 15 January 2028: end of the enhanced oleh schedule (0.5% up to ₪6,055,070) for contracts signed after that date, unless the 2027-2028 budget extends it; the default fallback is the old oleh schedule (0.5% then 5%) or the resident schedule, whichever is better. 16 January 2028: end of the threshold freeze, after which the brackets resume annual indexation to the consumer price index. Rates: the Bank of Israel has brought its policy rate down to 3.25%; a slow decline is expected in 2027, which improves borrowing capacity but does not move the tax window. An oleh hesitating between signing in late 2027 and in 2028 should sign before 15 January 2028.

Frequently asked questions

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