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Buying property in Tel Aviv involves navigating a complex web of taxes and fees that can significantly impact your total investment cost. Property taxes and fees in Tel Aviv include purchase tax ranging from 0% to 10%, VAT at 18% for new properties, legal fees, broker commissions, and ongoing municipal taxes.
Understanding every cost component is crucial for accurate budgeting, as the total fees and taxes can add 15-25% to your property purchase price. The amount you pay depends heavily on your buyer profile, property type, location, and purchase price, with significant differences between Israeli residents, new immigrants, and foreign buyers.
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Property taxes and fees in Tel Aviv vary significantly based on buyer profile, with Israeli first-time buyers paying as little as 0% purchase tax, while foreign buyers face 8-10% rates.
Total transaction costs typically range from 10-25% of purchase price when including all taxes, legal fees, broker commissions, and ongoing municipal obligations.
| Tax/Fee Type | Rate | Who Pays |
|---|---|---|
| Purchase Tax (Israeli Resident, First Property) | 0% up to ₪1,978,745, then 3.5%-5% | Buyer |
| Purchase Tax (Foreign Buyer) | 8% up to ₪6,055,070, then 10% | Buyer |
| VAT (New Properties) | 18% | Buyer |
| Legal Fees | 0.5-1.5% + VAT | Buyer |
| Broker Fees | 1-2% + VAT | Buyer |
| Arnona (Municipal Tax) | ₪38-111 per sqm annually | Owner |
| Registration Fees | ₪182-600 | Buyer |
What is your buyer profile and which tax rates apply to you?
Your buyer profile determines the tax brackets and exemptions you qualify for when purchasing property in Tel Aviv.
Israeli residents buying their first property receive the most favorable treatment, with purchase tax starting at 0% for properties up to ₪1,978,745 as of September 2025. If you already own property in Israel or abroad, you fall into the "multiple property owner" category with higher tax rates starting at 8%.
New immigrants (Olim Chadashim) within 7 years of Aliyah can access special reduced rates on their first Israeli property, potentially saving hundreds of thousands of shekels. Foreign buyers face the highest purchase tax rates of 8% on the first ₪6,055,070 and 10% above that threshold.
As of September 2025, the tax brackets freeze at these levels, meaning no inflation adjustments are being made to the thresholds, effectively increasing the real tax burden over time.
What are the exact purchase price details and property specifications?
The purchase price structure and property specifications directly impact your total tax liability in Tel Aviv.
For a typical example, consider a ₪3,500,000 apartment in central Tel Aviv comprising 90 net square meters, purchased new from a developer, with one parking space and storage unit included. The parking space typically adds ₪150,000-250,000 to the base price, while storage adds ₪50,000-80,000, both subject to the same tax rates as the main property.
New properties from developers include different tax structures than second-hand purchases. New builds are subject to VAT at 18%, while second-hand properties are exempt from VAT but may have different purchase tax calculations. The net square meter calculation excludes balconies and common areas, focusing only on interior living space for tax purposes.
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How do you calculate your purchase tax (Mas Rechisha) with exact amounts?
| Buyer Profile | Tax Brackets | Rate |
|---|---|---|
| Israeli Resident, First Property | Up to ₪1,978,745 | 0% |
| Israeli Resident, First Property | ₪1,978,745 - ₪2,347,040 | 3.5% |
| Israeli Resident, First Property | ₪2,347,040 - ₪20,183,565 | 5% |
| Foreign Buyer | Up to ₪6,055,070 | 8% |
| Foreign Buyer | Above ₪6,055,070 | 10% |
| New Immigrant (Oleh) | Up to ₪2,197,530 | 0% |
| New Immigrant (Oleh) | ₪2,197,530 - ₪7,323,805 | 0.5% |
For a ₪3,500,000 property purchased by an Israeli resident as their first home, the calculation is: ₪0 (first ₪1,978,745) + ₪12,890 (₪368,295 × 3.5%) + ₪57,648 (₪1,152,960 × 5%) = ₪70,538 total purchase tax.
Foreign buyers purchasing the same property would pay: ₪280,000 (₪3,500,000 × 8%) = ₪280,000 total purchase tax. The payment is due within 50 days of signing the purchase agreement, with penalties of 4% monthly interest for late payments.
Is VAT included in new property prices and what are the exact costs?
VAT at 18% applies to all new construction properties in Tel Aviv as of January 2025, representing a significant cost component.
Most developers quote prices including VAT, but you must verify this in your purchase agreement. If VAT is not included in a ₪3,500,000 new apartment, the additional VAT would be ₪531,915, bringing the total to ₪4,031,915.
The VAT increase from 17% to 18% in January 2025 affects all outstanding payments on previously purchased new properties. For example, if you have a remaining balance of ₪1,000,000 on a new property purchase, the VAT increase adds approximately ₪8,500 to your total cost.
Second-hand properties are exempt from VAT, but the market typically adjusts prices to maintain relative parity with new construction, meaning some of the VAT burden is indirectly passed through to second-hand buyers.
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What are your total attorney fees including VAT?
Legal representation is mandatory for property purchases in Israel, with attorney fees typically ranging from 0.5% to 1.5% of the purchase price plus 18% VAT.
For a standard residential purchase in Tel Aviv, expect to pay approximately 1% of the purchase price plus VAT. On a ₪3,500,000 property, this equals ₪35,000 in base legal fees plus ₪6,300 VAT, totaling ₪41,300.
Attorney fees cover contract review, due diligence, coordination with the land registry (Tabu), mortgage documentation if applicable, and representation at closing. Additional services like English translation of documents typically cost ₪2,000-4,000 extra.
Some attorneys charge fixed fees for standard transactions, particularly for apartments under ₪5,000,000, which can sometimes result in lower total costs than percentage-based billing.
What are your buyer's brokerage fees with VAT included?
Buyer's brokerage fees in Tel Aviv typically range from 1% to 2% of the purchase price plus 18% VAT, depending on property type and market conditions.
For residential properties, the standard rate is 1.5% plus VAT. On a ₪3,500,000 purchase, this equals ₪52,500 in base commission plus ₪9,450 VAT, totaling ₪61,950. Luxury properties above ₪10,000,000 may command higher commission rates of 2-2.5%.
Unlike many countries where the seller pays all commissions, in Israel the buyer typically pays their broker directly. Some developers offer commission-free sales, but prices may be adjusted accordingly.
International buyers often benefit from specialized brokers who provide English-language service and understand foreign buyer needs, though this expertise may come at premium rates.
What mortgage-related costs should you budget for?
Mortgage costs in Tel Aviv include multiple components that can add ₪15,000-40,000 to your transaction depending on loan size.
Bank origination fees range from 0.25% to 1% of the loan amount. For a ₪2,000,000 mortgage, expect ₪5,000-20,000 in origination fees. Property appraisals cost ₪3,000-5,000, while mandatory life insurance runs ₪100-300 monthly depending on age and loan amount.
Property insurance typically costs ₪50-100 monthly, while lien registration at the land registry requires ₪182 per form filed. Additional costs include mortgage broker fees (if used) of 0.5-1% of loan amount, and legal review of mortgage documents.
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Where is your title registered and what are the exact transfer fees?
Property titles in Tel Aviv are registered with the Israel Land Registry (Tabu), with registration fees typically ranging from ₪182 to ₪1,000 depending on transaction complexity.
Standard residential transfers require ₪182 for basic registration, plus additional fees for mortgage registration (₪182), power of attorney registration (₪182), and any amendments or corrections. Complex transactions involving company ownership or multiple parties can reach ₪600-1,000 in total registry fees.
New developments may initially register with the Israel Land Authority (ILA) before transferring to individual ownership via Tabu. Some luxury projects use company registry structures, requiring additional corporate documentation and higher fees.
Registration typically takes 30-60 days after all documentation is submitted, with delays possible during peak periods or for complex transactions requiring additional review.
What is your exact monthly and annual Arnona calculation?
Arnona (municipal property tax) in Tel Aviv varies significantly by location, property size, and building type, ranging from ₪38 to ₪111 per square meter annually as of 2025.
For a 90-square-meter apartment in central Tel Aviv's premium areas, expect approximately ₪85 per square meter annually, totaling ₪7,650 per year or ₪638 monthly. Older buildings in less central locations may pay as little as ₪38 per square meter (₪3,420 annually), while luxury properties above 140 square meters in prime areas can reach ₪111 per square meter (₪9,990 annually for a 90sqm unit).
Arnona rates are set annually by Tel Aviv Municipality based on property classification codes that consider building age, neighborhood desirability, proximity to amenities, and apartment size. The calculation uses net square meters including storage and parking spaces.
Bills are issued bi-monthly with discounts available for annual prepayment. Late payment penalties of 4% monthly apply, and unpaid Arnona can result in property liens.
Do you qualify for Arnona discounts and what are the reduced amounts?
1. **New immigrants (Olim)** - Up to 90% discount in first year, 75% in second year, 50% in third year2. **Students** - 25% discount with valid student status verification 3. **Senior citizens (65+)** - 25% discount on properties under specified size limits4. **Disabled persons** - 50% discount with disability certification5. **Single parents** - 25% discount with municipal approval6. **IDF reservists** - Temporary discounts during extended service periodsFor a new immigrant paying ₪7,650 annual Arnona, the first-year discount (90%) reduces payments to ₪765, saving ₪6,885. Students with the 25% discount would pay ₪5,738 instead of ₪7,650, saving ₪1,913 annually.
Discount applications require documentation renewal annually or bi-annually depending on the category. Processing takes 30-45 days, and discounts typically apply from the application date forward rather than retroactively.
Are there planning-related charges like betterment levy?
Betterment levy (Hetel Hashbacha) applies when property rights are upgraded or expanded, typically affecting new construction projects and property improvements.
The levy equals 50% of the increased property value resulting from planning permission changes, infrastructure improvements, or zoning upgrades. For example, if a building permit increases your property value from ₪3,000,000 to ₪3,500,000, the betterment levy would be ₪250,000 (50% of the ₪500,000 increase).
New apartment buyers usually don't face betterment levies as developers handle these costs during the planning phase, but verify this in your purchase agreement. Second-hand buyers may encounter betterment levies if the seller performed major renovations or expanded the property.
Development fees for infrastructure connections (water, sewage, electricity) are typically included in new development prices but may apply separately for major renovations or additions to existing properties.
What other one-off and recurring costs should you budget for?
| Cost Category | Amount Range (₪) | Frequency |
|---|---|---|
| Building Maintenance (Va'ad Bayit) | ₪400-1,200 | Monthly |
| Elevator Maintenance | ₪50-150 | Monthly |
| Parking Maintenance | ₪30-100 | Monthly |
| Property Survey | ₪3,000-6,000 | One-time |
| Document Translation | ₪2,000-4,000 | One-time |
| Moving/Utility Deposits | ₪3,000-8,000 | One-time |
| Renovation Permits | ₪5,000-25,000 | As needed |
Building maintenance fees (Va'ad Bayit) are the largest ongoing cost after Arnona, covering common area maintenance, security, cleaning, and building management. Luxury buildings with amenities like pools, gyms, or concierge services can charge ₪1,000-2,000 monthly.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding all property taxes and fees in Tel Aviv is crucial for accurate investment budgeting and avoiding costly surprises during the purchase process.
The total cost of taxes and fees typically ranges from 10-25% of the purchase price, varying significantly based on buyer profile, property type, and specific circumstances.
Sources
- Purchase Tax Rates in Israel - Dray & Dray
- Real Estate Taxes in Israel, 2025 - Doron Aharoni Law Office
- Arnona & City Taxes - Tel Aviv-Yafo Municipality
- Taxation in Israel - Nefesh B'Nefesh
- Israel Property Taxes for Foreign Buyers - Davidson Real Estate
- Municipal Property Tax in Israel - BuyItInIsrael
- Israel Corporate Other Taxes - PWC
- Taxation in Israel - Wikipedia