Taxes in Israel: What Residents Pay
Reading time: 5 minutes
- Income tax with progressive rates from 10% to 50%.
- Real estate purchase tax for property transactions.
- VAT at 17% on most goods and services.
- Municipal tax arnona for homeowners and tenants.
- Other taxes on inheritance, gifts, and vehicle tax.
Article Contents
- Income tax and social contributions
- Real estate tax
- Value Added Tax (VAT)
- Local municipal taxes
- Other important taxes and fees
Income tax and social contributions
The main tax for individuals is income tax (mas ahnasa). Its rate is progressive and depends on your income level, ranging from 10% to 50%. The tax is automatically withheld by the employer. In addition to this, deductions are made from wages for national insurance (Bituach Leumi) and health insurance (Kupat Holim). These contributions provide access to the state healthcare system and social benefits. Self-employed individuals are required to calculate and pay these payments themselves on a monthly or bi-monthly basis.
Real estate tax
In the real estate sector in Israel, there are several types of payments. When purchasing an apartment, real estate purchase tax (mas rechisa) is paid, the amount of which depends on the buyer’s status and the property value. Property owners who rent it out are required to declare the income and pay income tax on it. If you plan to rent or sell your apartment, place an ad in the Real Estate section, and it will be automatically translated, attracting potential tenants or buyers from different language groups.
Value Added Tax (VAT)
Value Added Tax, or Maam, is the main indirect tax in the country. The standard rate is 17% and is included in the cost of most goods and services. However, there are also preferential rates, and some transactions (for example, exports) are exempt from VAT. For entrepreneurs and companies, it is extremely important to maintain proper VAT accounting to submit reports on time and recover the tax paid. If your business is related to providing services, tell the entire population about it by placing an ad in the Services section.
Local municipal taxes
Every resident of Israel who owns or rents a home is required to pay municipal tax — arnona. Its amount is set by local authorities and depends on the type of property, its area, and location. Payment of arnona is mandatory, and arrears can lead to the accumulation of fines. This tax is not related to the owner’s income and is paid separately. When moving and changing homes, many face the need to sell or give away unnecessary items, which can be conveniently done through the Second Hand section.
Other important taxes and fees
In addition to the main ones, there are other significant taxes. For example, when purchasing a new car, a purchase tax (mas rechisa na reheva) is levied, which can reach significant amounts. When inheriting property or receiving expensive gifts, inheritance and gift tax may be levied. It is also important to remember customs duties when importing goods from abroad. If, on the contrary, you want to get rid of an old car, you can easily find a new owner for it by placing an ad in the Auto section.
Conclusion
In conclusion, it can be said that Israel’s tax system is multi-level and affects almost all areas of financial life. Understanding your obligations to the state allows you to properly plan your budget and avoid unpleasant surprises. We have reviewed the key types of taxes: income, real estate, VAT, and municipal fees. This information will help you feel more confident. And remember, no matter what field you are active in — whether it’s job search, car sale, or housing rental — our platform provides you with maximum audience reach. Your ad, automatically translated into Hebrew, English, Russian, and Arabic, will be seen by everyone. Effectively use this tool to achieve your goals!
Frequently Asked Questions
Here you can ask your questions about Israel’s tax system or share your experience.