Understanding Mas Rechisha (Purchase Tax) as an Oleh

Why this matters

Mas Rechisha (real estate purchase tax) is the largest single closing cost when buying property in Israel. For an Oleh buying a typical NIS 3 million apartment, the tax is between NIS 60,000 and NIS 130,000 depending on which track applies. Picking the right track and timing the purchase correctly can save tens of thousands of shekels.

What Mas Rechisha is

A one-time tax paid to the Israeli Tax Authority (Rasha'ut HaMisim) when you buy real estate. Due within 60 days of signing the purchase contract (Heskem Mecher). Calculated as a percentage of the purchase price.

The tax has different brackets depending on:

- Whether this is your first home (single home, Dira Yechida)

- Whether you are an Israeli resident or an Oleh

- Whether the property is residential or commercial

- Whether you already own other Israeli property

The 4 tracks for residential property

Track 1: Israeli first-home buyer (Dira Yechida)

Available to any Israeli resident who does not own another property at the time of purchase. 2026 brackets:

- 0% on the portion up to NIS 1,978,745

- 3.5% on NIS 1,978,745 to NIS 2,347,040

- 5% on NIS 2,347,040 to NIS 6,055,070

- 8% on NIS 6,055,070 to NIS 20,183,565

- 10% above

Track 2: Oleh track (Maslul Oleh)

Available to new Olim within 7 years of the aliyah date, only for a primary residence. 2026 brackets:

- 0.5% on the portion up to NIS 1,978,745

- 5% on NIS 1,978,745 to NIS 5,936,235

- 10% above

Track 3: Israeli investor / second home buyer

Standard rate for any property that is not your first home:

- 8% on the portion up to NIS 5,936,235

- 10% above

Track 4: Commercial property

15% on the full price for non-residential. Different rules apply.

Worked examples

Example A: Olah buys a NIS 1.5M apartment in Be'er Sheva

Regular first-home track: 0% on entire price = NIS 0

Oleh track: 0.5% x NIS 1,500,000 = NIS 7,500

The regular Israeli first-home track is cheaper for this Olah. She should NOT use the Oleh track here.

Example B: Oleh family buys a NIS 2.5M apartment in Modi'in

Regular first-home track:

- 0% x NIS 1,978,745 = NIS 0

- 3.5% x (NIS 2,347,040 - NIS 1,978,745) = NIS 12,890

- 5% x (NIS 2,500,000 - NIS 2,347,040) = NIS 7,648

- Total: NIS 20,538

Oleh track:

- 0.5% x NIS 1,978,745 = NIS 9,894

- 5% x (NIS 2,500,000 - NIS 1,978,745) = NIS 26,063

- Total: NIS 35,957

Regular Israeli first-home is cheaper by NIS 15,419.

Example C: Oleh buys a NIS 4M apartment in Tel Aviv

Regular first-home track:

- 0% x NIS 1,978,745 = NIS 0

- 3.5% x NIS 368,295 = NIS 12,890

- 5% x (NIS 4,000,000 - NIS 2,347,040) = NIS 82,648

- Total: NIS 95,538

Oleh track:

- 0.5% x NIS 1,978,745 = NIS 9,894

- 5% x (NIS 4,000,000 - NIS 1,978,745) = NIS 101,063

- Total: NIS 110,957

Regular Israeli first-home still cheaper by NIS 15,419.

Example D: Oleh buys a NIS 7M penthouse in Jerusalem

Regular first-home track:

- 0% x NIS 1,978,745 = NIS 0

- 3.5% x NIS 368,295 = NIS 12,890

- 5% x (NIS 6,055,070 - NIS 2,347,040) = NIS 185,402

- 8% x (NIS 7,000,000 - NIS 6,055,070) = NIS 75,594

- Total: NIS 273,886

Oleh track:

- 0.5% x NIS 1,978,745 = NIS 9,894

- 5% x (NIS 5,936,235 - NIS 1,978,745) = NIS 197,875

- 10% x (NIS 7,000,000 - NIS 5,936,235) = NIS 106,377

- Total: NIS 314,146

Regular first-home still cheaper.

Example E: Oleh investor buys a NIS 2M rental property

Investor track (Olim do not get a different rate for investments):

- 8% x NIS 2,000,000 = NIS 160,000

Painful. Investment properties pay 8 percent from the first shekel.

When the Oleh track actually helps

In most realistic scenarios in 2026, the regular Israeli first-home track beats the Oleh track. The Oleh track only wins when:

- You already own a home elsewhere and are buying a second residence in Israel (then you do not qualify for the first-home track, and the Oleh track at 0.5%/5%/10% beats the investor 8%/10%)

- You bought your Israeli property within 18 months of aliyah and have not sold the home in your home country yet (similar scenario, you may not qualify as Israeli first-home but the Oleh track still works)

The Oleh track exists primarily to help Olim who still own property abroad. Once you sell the foreign property within 24 months of buying in Israel, you can switch to the first-home track and reclaim the difference.

The Olim-with-foreign-property rule

If you own property abroad and buy a residence in Israel:

- At the time of the Israeli purchase, you do not qualify as Israeli first-home buyer.

- Use the Oleh track at the lower 0.5%/5%/10% rates instead of the investor 8%/10%.

- If you sell the foreign property within 24 months of the Israeli purchase, you can re-file and switch to the first-home track. The Tax Authority refunds the difference.

This is the most common Oleh scenario and where the Oleh track saves real money.

When to use Mas Rechisha calculators

The Israel Tax Authority has an official calculator (Calculator Mas Rechisha) on misim.gov.il. Run both tracks before signing the contract.

Better: ask your real estate lawyer to model 3 scenarios:

1. Israeli first-home track if you sell the foreign property within 24 months

2. Oleh track if you keep the foreign property

3. The actual tax if you wait one more month or year to file

Process

1. Sign the Heskem Mecher (purchase contract).

2. Within 30 days, file Doch Mas Rechisha online at misim.gov.il.

3. Declare which track you are using and why.

4. The Tax Authority issues a Shuma (assessment).

5. Pay within 60 days of the signing date.

6. If foreign property sells within 24 months, file a refund claim.

Common mistakes Olim make

Defaulting to the Oleh track. Sounds like a benefit, often is not. Calculate both.

Forgetting the 24-month switching rule. Many Olim pay Oleh rates, then sell the foreign house in month 25 and lose the right to refile. Mark the calendar.

Buying as a couple where one is Israeli and one is Oleh. Israeli Tax Authority may treat the couple as Israeli first-home buyer (no Oleh track needed) if the Israeli spouse qualifies. Talk to a lawyer.

Skipping a real estate lawyer. Mas Rechisha rules are technical. The NIS 8,000 to NIS 20,000 legal fee saves more in tax than it costs.

What to do before buying

1. Get the official aliyah date stamped on your Teudat Oleh. This starts the 7-year Oleh clock.

2. Document foreign property ownership (deed, tax receipts).

3. Plan whether you will keep or sell the foreign property.

4. Run both Mas Rechisha tracks on the Israeli Tax Authority calculator.

5. Hire a real estate lawyer experienced with Olim. Sandy Cardin, Cohen-Saban, and Yitzhaki firms in Tel Aviv-Jerusalem all have Anglo Olim practices.