NEWS

Israel: Major tax reform for new immigrants – Huge savings on property purchases.

A new era is dawning for new immigrants to Israel. The Knesset has just approved a major tax reform that considerably simplifies the purchase of real estate for this category of the population. Significant savings are at stake, paving the way for a more harmonious integration in the Holy Land.

Unprecedented tax benefits

Until now, new immigrants have enjoyed limited tax breaks on the purchase of their first home in Israel. The new reform, however, changes this by offering unprecedented tax benefits. Specifically, new immigrants will now be able to claim significant reductions on the Olim Hadashim acquisition tax, allowing them to save tens, if not hundreds, of thousands of shekels.

Here are the new rates:

Up to 1,978,745: 0 Nis acquisition tax.
Between 1,978,745 and 6,000,000 nis: 0.5%
Above: according to the normal tax system

A concrete example

Let's take the example of an apartment worth NIS 5.6 million. Before the reform, a new immigrant would have had to pay NIS 200,000 in purchase tax. With the new law, this amount is reduced to only NIS 20,000, a saving of NIS 180,000!

A clear message: Aliyah encouraged

Beyond the economic aspect, this reform sends a strong message to Jews around the world: aliyah is a priority for the State of Israel. By facilitating access to real estate ownership, the Israeli government wants to encourage immigration and facilitate the integration of newcomers.

Savings simulator: calculate your benefits

Would you like to know how much you could save thanks to this reform? We have developed a simulator that will allow you to calculate the amount of your tax benefits.

Contact us to learn more about the acquisition tax for Olim Hadashim.

Buying real estate in Israel is now within reach of all new immigrants. Don't wait any longer to realize your dream of living in Israel!

The most expensive property sold in 2023 was a cottage in Villa Rothschild in Tel Aviv, purchased for NIS 77,200,000 (18,820,367 euros)

In 2023, the dramatic events in Israel did not prevent the wealthiest people from continuing to invest in luxury real estate at high prices. According to an analysis by Madlan based on data from the Tax Authority, the most expensive real estate of the year has been identified. Tal Kopel, CEO of Madlan, stressed that "the Israeli luxury market is unique, attracting both foreign residents and a wealthy Israeli elite." Interest rate hikes at the beginning of the year had only a limited impact on this market segment. The data does not cover November and December, a period likely impacted by the war.

The most expensive property sold in 2023 was a cottage in Villa Rothschild in Tel Aviv, purchased for NIS 77,200,000 (18,820,367 euros). The six-room house covers 549 m² and four floors. The price per m² reaches NIS 140,619 (34,283 euros). Located on the prestigious Rothschild Boulevard, this luxury villa, built in 2022, includes three residential floors, a 190 m² open roof with terrace, and seven underground parking spaces. The villa, renovated before the sale, has a private garden and a swimming pool.

The second most expensive transaction was a 310-square-meter four-room apartment in Rothschild Tower 1 , which sold for NIS 49 million (11,943,977 euros). Located on the 14th floor of a 30-story building, it fetched a price per square meter of NIS 158,065 (38,534 euros).

In third place, a six-room apartment in Park Tzameret , one of Tel Aviv's most luxurious neighborhoods, was sold for NIS 38 million (9,261,341 euros). The apartment, located on the 42nd floor of the W PRIME tower, covers an area of 471 square meters with a price per square meter of NIS 80,679 (19,663 euros).

In fourth place, a garden apartment in the picturesque Neve Tzedek neighborhood was sold for NIS 29,500,000 (7,190,041 euros). The four-room apartment covers 202 square meters and is located in a luxury complex near the beach. The adjacent project under construction includes five buildings on an area of three dunams, three of which will be preserved and will incorporate the historic "Shaarei Torah" synagogue.

Finally, a five-room penthouse in the Aviv B'Gimmel Towers in Ramat Aviv Gimmel, on the seafront, known as one of the most luxurious neighborhoods in Israel, was sold for NIS 29 million (7,069,161 euros). Located on the top floor of a tower built in 2018, this 441 square meter apartment was sold for NIS 65,760 (16,029 euros) per square meter.

The study notes that the global surge in inflation and interest rates over the past two years has led to a stabilization of the market.

Tel Aviv's real estate market has moved from the "red" category, synonymous with bubble risk, to the "yellow" category, indicating overvaluation, according to the 2023 UBS Global Real Estate Bubble Index. The study notes that "the global surge in inflation and interest rates over the past two years has led to a sharp decline in imbalances in real estate markets in the world's financial centers on average."

Tel Aviv thus joins the list of seven cities that have experienced a change of category, alongside Toronto, Frankfurt, Munich, Hong Kong, Vancouver and Amsterdam. On the other hand, Zurich and Tokyo remain the only cities still classified in the risk category of real estate bubble.

Regarding the Israeli metropolis, the UBS report states: "Between 2002 and 2022, real house prices in Tel Aviv tripled, the fastest growth of any city we analyzed. The rise in mortgage rates in 2022 brought this boom to an abrupt end. Mortgage volume growth has more than halved since last year, and real price growth was negative in the first half of 2023. This moderate easing in prices is likely to continue as there is no sign of a recovery in demand and unsold inventories have accumulated while the construction pipeline is full."

The interest rate cut helped home prices rise for the third time in two months, after falling for most of last year when high rates dampened consumer buying.

Residential real estate prices increased by 1.0% in January-February 2024, after increasing by 1.1% in December 2023-January 2024 and by 0.7% in November-December 2023, according to Israel's Central Bureau of Statistics (CBS).

Overall, house prices increased modestly by 0.3% in January-February 2024 compared to the same period last year.

The interest rate cut helped home prices rise for the third time in two months, after falling for most of last year when high rates dampened consumer buying.

Residential real estate prices increased by 1.0% in January-February 2024, after increasing by 1.1% in December 2023-January 2024 and by 0.7% in November-December 2023, according to Israel's Central Bureau of Statistics (CBS).

Overall, house prices increased modestly by 0.3% in January-February 2024 compared to the same period last year.

In Tel Aviv, prices increased by 2.1% in January-February 2024, compared to the period December 2023-January 2024, according to CBS data. They also increased by 0.7% in Jerusalem, by 1.3% in Haifa and by 0.4% in southern Israel.

Prices fell 0.2 percent in the north of the country as attacks by the Lebanese Shiite terrorist group Hezbollah from Lebanon continued.

In February this year, 7,511 homes were sold, an increase of 19% compared to the same period last year, according to figures from the Ministry of Finance. However, compared to January 2024, sales were down 7%. Historically, February 2024 has been one of the second weakest months of the year since the early 2000s, the ministry said.

Acquisitions by foreign residents, including investors, decreased by 16% in February compared to the same period last year, and by 14% compared to January 2024, the data showed.

Do you want to know the cost of a m2 in the city of Tel Aviv ?

Living: price of a square meter in the city of Tel Aviv in 2024
This year, to buy a square meter in the city of Tel Aviv the cost is 15619.6 €. This is an average price that can decrease to 13077.7 € and increase to 24674.9 € depending on the time of year. This cost for a square meter in the city is higher than the cost in France (+132%).

Price of a square meter in Tel Aviv city in 2024:

15619.6 €

Average price in country's currency: 63301 ₪ (ILS)

Minimum price: €13,077.7 (₪53,000 (ILS))
Maximum price: €24,674.9 (100,000 ₪ (ILS))

This information was last updated on: 01/10/2024.