The period, measured from first entry

The relief runs over a period that opens one year before first entry to Israel and closes seven years after it, and it may be used once. First entry is the operative event, not the date printed on the oleh certificate. Years spent in Israel on an A/1 temporary resident visa are therefore already inside the period, so someone who stayed on such a visa and completed the aliyah afterwards has the period counted from first entry. A period of compulsory service, and civil service as defined in the Civil Service Law, 5777-2017, is not counted within the seven years and defers the closing date. Until the amendment of August 2024 the regulation referred to national service under the National Service Law, 5713-1953.

Regulation 12A does not set a period of its own. It refers to the period fixed in Regulation 12(b), so a reader of Regulation 12A alone will not find it.

Where a purchase is planned close to either end of the period, what remains of it should be measured before the contract is signed.

An apartment bought under construction

The year that precedes first entry is short, and a purchase from a developer is often signed years before the keys are handed over. Regulation 12A(a) addresses this. Where the purchase is of an apartment with an undertaking by the seller to complete its construction, the time during which the apartment was under construction is not counted within that year. Two conditions attach: no more than three years may pass between the date of purchase and first entry to Israel, and one of the documents listed in Regulation 12(a)(1) must be issued to the buyer within one year of the date of purchase. A purchase signed more than three years before the aliyah, or one where the oleh document is obtained later than a year after signing, falls outside the extension.

Who is an oleh and who is not

The definition in Regulation 12(a)(1) is closed and enumerated. An oleh is a person who entered Israel after 28 February 1963 holding one of three documents: an oleh visa under section 2 of the Law of Return, an oleh certificate under section 3 of the Law of Return, or a visa or permit for temporary residence of type A/1. It attaches to the document held by the entrant on that entry, not to substantive status, to eligibility under the Law of Return, or to classification for tax purposes.

A veteran returning resident does not fall within the definition. The appeals committee sitting alongside the Tel Aviv District Court so held in VA 59273-01-22 Zvebner v. Director of Real Estate Taxation Tel Aviv, on 30 October 2024: “Regulation 12 applies to an ‘oleh’. The term appears in the regulation not as a general and flexible word whose meaning may vary according to context or over time, but as a legal concept that is well and fully defined.”

An Israeli citizen from birth cannot receive an oleh certificate under the Law of Return, and accordingly does not enter Israel within the meaning of the regulation.

The distinction surprises many, because a veteran returning resident is entitled to income tax reliefs under section 14 of the Ordinance, among them an exemption on income and on assets outside Israel for ten years. Those reliefs do not extend to purchase tax. The committee addressed the point in the same matter: “Amendment No. 168 to the Ordinance was intended to align the reliefs given to a veteran returning resident with those given to a first time resident, but this was done in particular contexts dealt with in the Ordinance. Amendment No. 168 did not amend, even indirectly, any provision of the Real Estate Taxation Law.”

The Ordinance and the purchase tax regulations use a different vocabulary. The Real Estate Taxation Law itself names a veteran returning resident in one place only, in section 9(c1c)(4)(b), and that is where the single route available to him is found.

The route for someone who is not an oleh

Someone who is not an oleh and who buys an apartment while a foreign resident is not necessarily left on the foreign resident brackets. Section 9(c1c)(4)(b) of the Law provides that a buyer who becomes an Israeli resident for the first time, or a veteran returning resident, within two years of the date of purchase is treated as an Israeli resident for the single dwelling brackets. The route is also available to a person for whom the definition of an oleh is closed, a veteran returning resident included.

Where the property is bought under construction, the question is when the two year period starts. In VA 22899-10-22 Boni Aizler v. Director of Real Estate Taxation Jerusalem, decided on 27 May 2025, the Jerusalem appeals committee held that the period runs from delivery of the apartment, and that the 2024 amendment to the regulations does not apply to a purchase that preceded it.

Spouses where only one is an oleh

Regulation 12(c) provides that where spouses buy together and only one of them is an oleh, the whole of the right is treated as if the oleh alone had acquired it. The relief therefore applies to the full value of the purchase and not to half of it, and Regulation 12A(d) applies the rule to the purchase of a residential apartment as well. Two individuals who bought together without being married, and who married within twelve months of the date of purchase, are entitled to a refund of the difference.

In most cases the question does not arise. Under section 4A of the Law of Return the rights of a Jew are vested in his spouse as well, so both spouses usually hold an oleh document of their own. The rule is needed where the spouse cannot be an oleh, for example an Israeli citizen, or where the relief has already been used. Once the deeming provision applies, the whole of the purchase is attributed to the oleh for the once only limit as well.

The single dwelling condition

Since the amendment of August 2024 the relief for a residential apartment sits in Regulation 12A of the Real Estate Taxation Regulations, and it is conditional on the buyer meeting the single dwelling condition in section 9(c1c)(2) of the Law. The purchase is examined as the purchase of a single dwelling.

The dwellings of the spouse and of children under the age of eighteen are counted together with those of the buyer himself. A dwelling held abroad does not enter that count, and a dwelling in Israel does. The buyer also declares that the apartment will in fact serve for residence, and that declaration is examined after the fact rather than at the date of purchase. Where a family already holds a property in Israel, or where a second purchase is under consideration, the order in which the two transactions are signed determines the rate on both.

The rates

The amounts below are in force from 16 January 2025 to 15 January 2028 and are not updated during that period. The Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for Budget Year 2025) (Freeze of Tax Updates and Surtax), 5785-2024, froze the updating of the amounts in tax years 2025 to 2027.

The ceiling

The relief applies only where the value of the apartment does not exceed ILS 20,183,565. Above that amount the relief is not given at all, and the purchase is taxed on the ordinary brackets that apply to the buyer.

What the 2024 amendment changed

The Real Estate Taxation (Appreciation and Purchase) (Purchase Tax) Regulations (Amendment), 5784-2024, were published in Kovetz HaTakanot 11414 on 12 August 2024 and came into force on 15 August 2024.

Before the amendment an oleh paid 0.5% on the part up to the first bracket and 5% above it, whether the purchase was of a first dwelling or of an additional one. The old relief was of use mainly on an additional dwelling. The amendment moved the relief to Regulation 12A and tied it to the single dwelling condition, so that it now follows the same policy that applies to the rest of purchase tax. An oleh buying an additional dwelling pays the rates applicable to investors.

In the same amendment Regulation 12 was narrowed to the purchase of business premises only, including an agricultural farm, at 0.5% on the part of the value up to ILS 1,988,090 and 5% above it. The relief on a residential apartment moved in its entirety to Regulation 12A. Each of the two reliefs may be used once.

An oleh whose day of aliyah to Israel preceded 15 August 2024 may elect that the text of Regulation 12 as it stood on the eve of that day apply to him. That text contains no single dwelling condition and no ceiling of value. The election appears as a separate tick alternative on form 2973.

How the relief is claimed

The relief is claimed on form 2973, application for a partial exemption or relief in purchase tax. Attached to it is an extract of registration from the Ministry of the Interior evidencing oleh status, and, on a joint purchase by spouses where one of them qualifies, a marriage certificate.

Someone who paid purchase tax at the full brackets and received the status document afterwards files an application to amend the assessment under section 85 of the Law, on form 7085, within four years of the date on which the assessment was made. Filing the application does not stop interest, linkage differentials or penalties.

Three dates that are not the same date

A file opened around an aliyah is governed by three separate dates. First entry to Israel opens the purchase tax period. The day on which a person’s centre of life moves here determines residence for income tax purposes. The date on the oleh certificate is not the operative date for purchase tax. A contract may be signed inside one period and outside another.

Further reading

Last updated: 14 September 2026

This page is a general overview only. It is not legal or tax advice and should not be relied on in making decisions. The law, the amounts and the brackets change from time to time, and specific circumstances require individual advice.