People with disabilities may be entitled to a reduced purchase tax of 0.5% of the value of the property, when purchasing a home in which they will live.
When purchasing a single residence, valued up to NIS 2,500,000 (as of 2019), there is a tax exemption on the first payment bracket.
You can use the Purchase Tax Simulator on the Tax Authority's website to calculate the amount of tax owed.
For more information, see Regulation 11 of the Property Tax Regulations (Improvement and Acquisitions) (Purchase Tax)
People with disabilities may be entitled, in accordance with the relevant conditions, to pay a reduced purchase tax when purchasing a home in which they will live.
- Those who buy a piece of land to build on, are eligible to pay a reduced income tax of 0.5% on the part of the land that the house they will live in will be built on (regular income tax is paid on the rest of the property) and on the condition that the house is built within 2 years.
- In some cases, as detailed below, applicants must appear before a National Insurance Institute Medical Committee in order to have benefit eligibility determined.
Benefit Rate in Purchase of a Single Home worth up to NIS 2,500,000
- For the purchase of a single home worth up to NIS 2,500,000 made from 6.12.2016 and onward (see the definition below), there is a tax exemption on the first payment bracket:
- On the part worth up to NIS 1,696,750, one will not pay purchase tax from 16.01.2019 until 15.01.2020 (up to NIS 1,664,520 in the previous year).
- On the remaining amount of the worth of the house (up to NIS 2,500,000), one must pay 0.5% of the value of that part.
Benefit Rates in the Remainder of Cases
- When purchasing a home that is not defined as a single home, or is a single home worth over NIS 2,500,000, and for a purchase of a single home worth less than NIS 2,500,000 that was made before 6.12.2016, the benefit is to pay a reduced purchase tax of 0.5% on the value of the home.
Definition of a Single Home
- A single home is defined as the only home of an Israel resident, including someone who became an Israeli resident or a returning resident within two years of purchasing the home.
- The buyer of the home, his/her spouse that lives with him/her and his/her children (unmarried) up to age 18, are considered a single buyer for this purpose.
- The home is considered a single home even if the buyer owns another home that was rented to people through a protected rental before 01.01.1997 or an additional home that the buyer owns less than a third off, and if it was a home that was inherited the buyer can own up to a half.
- If the purchases owns an additional home to the one he/she is currently buying, and sells the previous months within 18 months of purchasing the new home, or within a year of receiving the new home if it was bought from a contractor - than he/she is considered the owner of a single home in the context of tax calculations (when the additional apartment is sold it must be reported right away to the local offices).
- The tax amounts for a single home will be used also in the purchase of an "alternate home" if the purchaser meets all of the following conditions:
- He/she has 2 apartments simultaneously in his/her possession and he/she sold one of them with a tax exemption.
- Within 12 months of selling the first home he/she sold the second home with a tax exemption in accordance with section 49 of the Property Tax Law (Purchase and Appreciation).
- The combined value of both of the homes does not exceed NIS 2,020,000 (right as of 01.01.2019-31.12.2019).
- In the year before or after the sale of the second home, he/she purchased a third home ("alternate home") for a cost of at least 3/4 of the combined value of the 2 previous homes.
Someone who purchases a home through a purchase group
- Someone who previously purchased a home through a purchase group and it was his only home is considered to be a single home owner if he meets one of the following conditions:
- The current (additional) home was purchased 6.5 years after he purchased a home with a purchase group and he still has not actually been given possession of the home by the buyer.
- The current home was purchased 4 years after the home with a group purchase and all of the following conditions apply:
- The current home was purchase after 25.06.2018.
- Construction has not started on the home purchased with the group (infrastructure and land preparation are not considered construction), or construction has started but the Tax Authority has put a significant delay on its completion.
- The buyer is not in control of the delays in construction beginning or being completed and he was unaware of such delays when he purchased the home through the purchase group.
- The buyer is considered to be a single home owner in the above two cases if he sells the home purchased with the purchase group within 18 months from when it is finished being built and the home he bought now is his only other home aside from the one bought with the purchase group.
Someone who meets these criteria is also considered a single home owner in application of other benefits given by other laws (for example work allowance, income existence benefit and various rights from the National Insurance Institute), during the time between the purchase of the current home and sale of the home bought as part of a group purchase (on condition that the sale is made within 18 months from when construction is completed).
Who is Eligible?
- Those for whom the National Insurance Institute has established permanent incapacity to earn a living of at least 75%.
- Those for whom permanent medical disability has been established at 100%, or 90% according to a special weighted calculation due to combined disabilities in different parts of the body (depending on a National Insurance Institute Medical Committee).
- Those with an amputated or paralyzed arm or leg due to which permanent disability has been established to be at least 50% (depending on a National Insurance Institute Medical Committee).
- For information on other entitled populations, see:
- Purchase Tax Discount for the Blind and Visually Impaired
- Purchase Tax Discount on Residential Property for Children with 100% Disability (depending on a National Insurance Institute Medical Committee)
- Purchase tax discount for Holocaust survivors and those disabled in war against the Nazis
- Purchase tax discount for work disability victims
- Purchase Tax Discount for IDF War Veterans
- Purchase tax discount for victims of hostile acts
- Purchase tax discount for those who became disabled as the result of a road accident (depending on a National Insurance Institute Medical Committee)
How to Claim It?
- The request for the discount must be submitted to the Lands Taxes Office responsible for the area in which the property is located.
- The Help centers, services and resources of the tax authority can be consulted for assistance.
- The following documents must be attached to the request:
- Declaration form for sale/purchase of Real Estate for purchase of the property
- Form 2973 Partial Exemption from Purchase Tax for People with Disabilities Request Form
- For those for whom earning incapacity of at least 75% has been established, the relevant documentation from the National Insurance Institute must be attached
- Medical documentation indicating the disabilities must be attached.
- In the following cases, an applicant must appear before a National Insurance Institute Medical Committee in order to have eligibility be determined:
- Individuals for whom permanent disability of 100% has been established or 90% in accordance with a cumulative calculation of disabilities in various parts of the body.
- Full (100%) Disabled Child Benefit recipients.
- Individuals for whom permanent disability of at least 50% has been established who are also:
- Arm or leg amputees
- Disabled as the result of a road accident in accordance with The Compensation for Victims of Road Accidents Law
- The request to appear before a medical committee is submitted to the Lands Taxes Office along with the request to receiving a purchase tax discount. For more information, see: Purchase Tax Discount Medical Committee.
- 'A person can receive a purchase tax discount only twice during the course of his life.
- If a couple is buying a residence in order to live in it and one of the partners is entitled to the benefit, then they are both entitled to the discount. If the couple was not married when the residence was purchased, but they got married within 12 months of signing the purchase contract, they are entitled to a reimbursement of the value of 0.5% of what the eligible partner paid.
Purchase Tax Return for those that paid more than required
- The Israel Tax Authority has an application that enables those who have previously made a real estate transaction in to check whether there is a credit balance in their favor, due to them overpaying betterment or purchase tax.
- If there is a credit balance, you can receive the refund by filling out the details in the application.
- For more information, see Tax refund for over payment tax of betterment or purchase tax.
- For a list of aid organizations for people with disabilities
Laws and Regulations
- Land Taxation Law (Appreciation and Purchase) 1963
- Land Taxation Regulations (Appreciation, Sale and Purchase) (Purchase Tax) 1974]
- Instruction on Implementing Land Tax no. 1/2017 - update on amounts in land taxes and regulations of purchase tax
- Application Instructions for Property Tax no. 1/2018 - update of amounts in the Property Tax Law and the Purchase Tax Regulations.
- Income Tax Regulations (Establishing the Degree of Disability), 5740-1979 (on the Nevo website)
- Guide to the Sale/Purchase of Real Estate on The Israel Tax Authority website
- Purchase Tax Discount on the "Kol HaBriut" website.