Key Takeaways
- Foreign non-residents pay 8 percent on the property value up to ₪6,055,070 and 10 percent on the portion above. There is no 0 percent lower bracket for non-residents.
- Brackets are frozen through end of 2027 under the January 2025 Temporary Order (Horaat Shaa).
- Mas Rechisha is due within 60 days of contract signing, regardless of whether the property is off-plan or resale, and regardless of when keys are handed over.
- Olim Hadashim purchasing their first Israeli home within 7 years of Aliyah pay approximately 0.5 percent on the lower bracket and 5 percent above, conditional on personal occupation criteria.
Short Answer
Mas Rechisha is the purchase tax the buyer pays at every Israeli real estate transaction. The rate depends on the buyer's residency status. Foreign non-residents pay a flat 8 percent up to ₪6,055,070 and 10 percent above, due within 60 days of signing. Israeli first-time residents pay 0 percent on the first ₪1,978,745. Olim Hadashim within 7 years of Aliyah qualify for substantial relief.
Full Definition
Mas Rechisha is a transfer tax governed by Israel's Real Estate Taxation Law (Mas Shevach v'Mas Rechisha) and administered by the Israel Tax Authority (Rashut HaMisim). The buyer files a self-assessment form (the shuma atzmit) within 60 days of contract execution and pays the tax to the Tax Authority directly. Brackets are progressive, not cliff-edge, meaning the higher rate applies only to the portion of the purchase price above each threshold, not to the entire price. The Tax Authority publishes separate bracket tables for Israeli first-home buyers, Israeli investors and second-home buyers, foreign non-resident buyers, and Olim Hadashim. As of 2026, the foreign-buyer brackets are 8 percent on the first ₪6,055,070 of purchase price and 10 percent on the portion above. Israeli first-home buyers start at 0 percent on the first ₪1,978,745 and step up through 3.5, 5, 8, and 10 percent brackets up to ₪20,183,565 and above. Brackets are normally indexed annually to the Madad (Construction Input Index); the current freeze is a deliberate policy intervention under the January 2025 Temporary Order, in effect through end of 2027.
Why It Matters for Foreign Buyers
Mas Rechisha is the single largest line item in most foreign-buyer transactions after the purchase price itself. On a ₪3 million Tel Aviv apartment, the foreign buyer owes approximately ₪240,000 in Mas Rechisha, while an Israeli resident purchasing the same apartment as a first home owes approximately ₪79,000. Three planning levers materially change foreign-buyer exposure. First, Olim Hadashim relief: a buyer who has made Aliyah within 7 years can purchase a first Israeli home at the Olim brackets (approximately 0.5 percent on the lower bracket), producing six-figure savings on typical luxury price points. Second, Section 62 family transfers: lifetime transfers between spouse, child, grandchild, parent, grandparent, or sibling qualify for one-third of the standard Mas Rechisha rate, with the giver fully exempt from Mas Shevach (capital gains tax). Third, residency reclassification: a foreign buyer who becomes an Israeli resident within 2 years of acquisition may apply retroactively for resident-first-home rates, often producing significant refunds. All three levers require Israeli counsel to structure correctly during the purchase, not after.
Related Reading
- Mas Rechisha Calculator (2026 brackets, all buyer types)
- Complete Mas Rechisha guide for foreign buyers
- Oleh Chadash purchase tax relief
- Mas Shevach (Capital Gains Tax)
Sources and References
- Israel Tax Authority, Real Estate Tax bracket guidance
- Israel Tax Authority, Real Estate Tax Simulator
- Israeli Real Estate Taxation Law (Mas Shevach v'Mas Rechisha)
Reviewed by Hershtik & Adoram, May 2026. This glossary entry is informational and does not constitute legal or tax advice for any specific transaction. Israeli real estate law evolves; verify current rules with qualified Israeli counsel before relying on any specific figure or rule.