Israel: Living There - Tax Issues
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Living There
INDIVIDUAL TAXATION
Resident individuals are taxed on their worldwide income and capital gains. Married couples can opt for joint or separate taxation.
INCOME TAX
Income and capital gains are taxed at progressive rates. Different tax bands and tax rates apply for taxpayers under 60 years old and for taxpayers over 60 years old.
INCOME TAX 2007 |
|
| TAXABLE INCOME, NIS (US$) | |
| Up to 136,920 (US$35,140) | |
| 140,640 – 202,080 (US$51,848) | |
| 202,080 – 435,120 (US$111,640) | |
| Over 435,120 (US$111,640) | |
| Source: Global Property Guide | |
INCOME TAX 2007 |
|
| TAXABLE INCOME, NIS (US$) | |
| Up to 52,680 (US$13,516) | |
| 52,680 – 93,720 (US$24,046) | |
| 93,720 – 140,640 (US$36,084) | |
| 140,640 – 202,080 (US$51,848) | |
| 202,080 – 435,120 (US$111,640) | |
| Over 435,120 (US$111,640) | |
| Source: Global Property Guide | |
Residents are entitled to deduct the following:
- Personal tax credit of NIS2,268 (US$582) annually and dditional tax credits (based on the personal tax credit) for the taxpayer’s family circumstance
- Dependent allowance for children below 18 years of age
- Old age allowance and disability allowance
- Unemployment allowance
- Life insurance premiums up to 25%
- National insurance contributions
RENTAL INCOME
Rental income is taxed at progressive rates. The taxable income is computed by deducting income-generating expenses from the gross income. Allowable deductions are depreciation, building insurance, municipal duties, management charges, maintenance and repairs. Depreciation rate is 2% per annum.
CAPITAL GAINS
Most properties sold in Israel are exempt from capital gains tax. If the gains are taxable, the net gain is taxed at the standard income tax rates.
Acquisition Tax
Buyers of Israeli real property may be subject to acquisition tax (transfer fee) levied at progressive rates on the property value at the time of the transfer. Different tax bands and rates apply to the first acquired property and to the succeeding properties acquired.
ACQUISITION TAX FOR FIRST |
|
| TAX BASE, NIS (US$) | |
| Up to 907,700 (US$232,891) | |
| 907,700 – 1,275,690 (US$327,307) | |
| Over 1,275,690 (US$327,307) | |
| Source: Global Property Guide | |
ACQUISITION TAX FOR SUCCEEDING PROPERTIES |
|
| TAX BASE, NIS (US$) | |
| Up to 772,310 (US$198,153) | |
| Over 772,310 (US$198,153) | |
| Source: Global Property Guide | |
PROPERTY TAX
Property taxes are no longer levied in Israel.
Israel - more data and information
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