How capital gains tax works in Israel
Israel taxes capital gains on the real, inflation-adjusted profit at 25%, or 30% for substantial shareholders holding 10% or more at sale or in the prior year. Post-1994 inflationary amounts are exempt and cost is CPI-indexed.
Real estate pays betterment tax near 25% on the real gain with linear relief for pre-2014 holdings: only post-2014 time-apportioned gain faces the full rate. Sole residences get exemptions generally unavailable to non-residents.
New immigrants and veteran returners pay nothing on foreign gains for ten years. Non-residents selling small Israeli shareholdings without local presence are generally exempt.
Tax rates at a glance
- Basic gains rate
- 25%Real gain
- Substantial rate
- 30%
- Property rate
- 25%
- Bond paper rate
- 15%
- Extra top surtax
- +2%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsCrypto holdersTradersHigh earnersFamily offices
Watch out for
- The 10% test looks back twelve months. Dropping below 10% just before sale does not escape the 30% rate.
- Pre-2003 acquisitions split into eras with historic rates. Old portfolios need era-by-era computation, not a single 25%.
- Capital income above ILS 721,560 adds 2% surtax since 2025. Big gains stack 27% or 32% all-in at the top.
- Sole-residence relief generally needs Israeli residence with no home abroad. Non-resident owners should not price in the exemption.
Frequently asked questions
Does Israel tax capital gains?
Yes, at 25% on inflation-adjusted gains and 30% for substantial holders, with property near 25% plus linear relief and a ten-year newcomer exemption.
Are crypto gains taxed in Israel?
Yes, as capital gains at 25% or 30% on the real gain, with supervision tightening on exchange reporting.
Is my home sale taxed in Israel?
Sole residences get exemptions for residents within caps, while investors and non-residents generally pay betterment tax near 25%.