Income tax on rent, worked example, in Israel

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Non-resident couple´s joint monthly rental income1
Monthly Rental Income2 1,500 6,000 12,000
Annual Rental Income 18,000 72,000 144,000
Less Expenses3 (1,500) (6,000) (12,000)
Less Depreciation4 (12,000) (48,000) (96,000)
= Taxable Income 4,500 18,000 36,000
Income Tax 6
Up to ILS 238,800 31% 1,398 5,580 11,160
ILS238,800 - ILS 496,920 35% - - -
ILS496,920 - ILS 640,000 47% - - -
Over ILS 640,000 50% - - -
Annual Income Tax Due 1,395 5,580 11,160
Tax Due as % of Gross Income 7.75% 7.75% 7.75%
Thanks to:
Fahn Kanne & Co Grant Thornton

Notes


Fahn Kanne & Co Grant Thornton is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 USD$= 4.00 ILS

3 Estimated values. Income-generating expenses are deductible when calculating taxable income.

4 Estimated values. The depreciation rate is 2% per annum.

5 Rental income is taxed at progressive rates.

INCOME TAX 2015 ON PASSIVE INCOME

TAX BASE, ILS(US$) TAX RATE
Up to 238,800 (US$ 59,700 ) 31%
238,800 - 496,920 (US$ 124,230 ) 35%
496,920 - 640,000 (US$ 160,000 ) 47%
Over 640,000 (US$ 160,000 ) 50%
Source: Global Property Guide



Non-resident couple´s joint monthly rental income1
Monthly Rental Income2 1,500 6,000 12,000
Annual Rental Income 18,000 72,000 144,000
= Taxable Income 18,000 72,000 144,000
Income Tax 3
Flat Rate 10% 1,800 7,200 14,400
Annual Income Tax Due US$1,800 US$7,200 US$14,400
Tax Due as % of Gross Income 10% 10% 10%
Thanks to:
Fahn Kanne & Co Grant Thornton

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on February 23, 2016.

Notes


Fahn Kanne & Co Grant Thornton is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 US$ = 4.00 ILS

3 The 10% tax is imposed on the gross rental income.