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What are my Aliya Benefits?
One of the biggest decisions an oleh (new immigrant) has to make is regarding housing.
Besides choosing where to live, when purchasing a house or apartment the oleh, oftentimes, is faced with a financing environment different from what they’re used to.
Below is a brief synopsis of benefits to which an oleh is entitled.
Purchase Tax
When purchasing land zoned for residential construction and/or an existing residential house or apartment with aliya rights, the tax is 0.5% on the first 1,928,220 shekels spent.
Above that amount, the purchase tax is 5%. Aliya rights apply to someone who made Aliyah within 7 years (not including time spent in military service) of purchasing their property (provided that it’s their first property).
For Israelis and tourists, the purchase tax is structured differently. For the first 1,919,155 shekels there is no tax. From 1,919,155 to 2,276,360 tax is 3.5%, and above that, the tax is 5%.
Hence, when comparing Israeli tax structure to an oleh tax structure, there are some key differences.
The following tables are for illustrative purposes only. Please consult a qualified professional prior to making any contractual agreements.
Purchase tax rates for residents with single residence
| Value (NIS) | Tax | |
|---|---|---|
| 0 – 1,919,155 | 0% | |
| 1,919,155 – 2,276,360 | 3.5% | |
| 2,276,360 – 5,872,725 | 5% | |
| 5,872,725 – 19,575,755 | 8% | |
| 19,575,755 + | 10% | |
| (Note: updated March 2023) | ||
Purchase tax rates for additional apartment of non-residents
| Value (NIS) | Tax | |
|---|---|---|
| 0 – 5,872,725 | 8% | |
| 5,872,725 + | 10% | |
| (Note: updated March 2023) | ||
Purchase tax rates for Olim
| Value (NIS) | Tax | |
|---|---|---|
| 0 – 1,928,220 | 0.5% | |
| 1,928,220 + | 5% | |
| (Note: updated March 2023) | ||
Mortgage benefits for Olim
The Israeli government gives olim (whether new immigrants or Israeli citizens born abroad), within 10 years of making aliyah, an entitlement in the form of a subsidized loan.
The interest rates are between 4-4.5% for a term of 20-28 years. The loan size is approximately 200,000 shekels so additional financing may be necessary.
To be eligible for these loans (“halva’at zakaut”) the oleh must obtain a “teudat zakaut”, issued through a mortgage bank, and have no previous ownership of real estate in Israel.
Note that depending on the area, the government may give an interest-free loan (“ma’anak”), but these are generally up to 50,000 shekels.
Contact Us here for more information on all types of mortgages and financing.
To gain a greater understanding of the mortgage landscape in Israel, it is also worth checking out all of First Israel’s Mortgage Services and current mortgage rates.
See further thoughts from First Israel, re Aliya: When to take your mortgage in Israel.
