What is the purchase tax (Mas Rechisha) for foreign buyers in Israel?

Foreign buyers (non-residents) pay Mas Rechisha at 8% on the first approximately ₪6 million of the purchase price, and 10% on any amount above that threshold. This is paid directly to the Israeli Tax Authority and is typically the single largest additional cost when buying property in Israel as a non-resident. Olim (new immigrants) and Israeli residents may qualify for significantly lower rates, including potential zero-rate brackets on a first home. Tax thresholds are updated periodically. Always consult a licensed Israeli attorney to confirm the applicable rate for your specific transaction.

How much are lawyer fees for buying property in Israel?

Israeli real estate lawyers typically charge between 1% and 2% of the purchase price plus VAT (currently 17%). For a ₪2,000,000 property, this translates to approximately ₪20,000–₪40,000 plus VAT. Your lawyer handles the purchase contract, due diligence, title search, title transfer at the Land Registry (Tabu), and all legal documentation. Engaging a lawyer is not optional; it is a legal and practical necessity for every property transaction in Israel.

What is the Madad (construction cost index) and how does it affect my purchase?

The Madad is Israel's official construction cost index, published monthly by the Central Bureau of Statistics. For new-build (off-plan) purchases, buyer payments are typically linked to this index via an indexation clause in the purchase agreement. As construction costs rise, outstanding payment installments increase accordingly. Budget 2–4% annually on unpaid balances as a safe planning estimate. For a 2–3 year construction period, consider adding 5–10% to the total contract price to account for Madad adjustments. Always review the indexation clause with your attorney before signing.

How much can I save on currency transfers when buying property in Israel?

The saving depends on the transfer size and rates, but as a benchmark: banks typically add a 1.5–2% markup on the exchange rate, while Adesco charges a fixed spread of 0.017 ILS per dollar. On a $500,000 transfer at a rate of 3.65, a bank markup of 1.5% costs approximately ₪27,375, while Adesco's spread costs approximately ₪8,500, a saving of around ₪19,000. Adesco can also help you schedule transfers over the term of your contract to manage exchange rate risk.

What are the total additional costs when buying a home in Israel as a foreigner?

Foreign buyers should budget 20-30% above the listed price for all additional costs. The main items are: (1) Mas Rechisha purchase tax: 8% on the first ₪6 million and 10% above (the largest single cost); (2) Lawyer fees: 1–2% plus VAT; (3) Real estate agent commission: 1–2% plus VAT; (4) Madad adjustments for on-paper purchases: typically 5–10% over a 2–3 year construction period; (5) Renovation if required: ₪150,000–₪1,000,000 or more; (6) Currency transfer: banks charge 1.5–2% markup while Adesco charges a fixed spread. Use the calculator above to enter your contract price and get a personalised breakdown.

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Foreign buyers typically pay 20-30% above the listed price

What Will Your Israel Property Actually Cost You?

Purchase tax (Mas Rechisha), lawyer fees, Madad adjustments, and renovation can push the total 20-30% above the listed price. Enter your contract price for a complete cost breakdown and see exactly how much you could save on your currency transfer with Adesco instead of your bank.

Property Purchase Price

Exchange Rate (USD to ILS)

Consider using a slightly lower rate as a planning precaution, as rates can shift before your payment date.

USD/ILS

Buying On-Paper or from a Developer?

Adds the Madad index adjustment to your estimate

Learn more about what is a Madad

Cost Breakdown

Adjust sliders or toggle items on/off to match your situation

Property Price

$500,000 x 2.98 = ₪1,489,350

₪1,489,350

$500,000

Purchase Tax (Mas Rechisha)Government

8.0%

₪119,148

$40,000

Lawyer FeesProfessional

1.0%

₪14,894

$5,000

Real Estate Agent / BrokerProfessional

2.0%

₪29,787

$10,000

Renovation & DesignOptional

₪148,935

$50,000

Furniture & AppliancesOptional

₪44,681

$15,000

Mortgage Setup CostsFinancing

1.5%

₪22,340

$7,500

Potential saving with Adesco

₪13,840

vs. transferring through a typical bank

Based on data from thousands of transfers completed through Adesco. Actual amounts may vary depending on the terms and timing of your transaction.

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Total Estimated Budget

₪1,869,134

$627,500

Additional costs above property price

₪379,784

= 25.5% above purchase price

Purchase Tax

₪119,148

6.4% of total

Lawyer Fees

₪14,894

0.8% of total

Real Estate Agent / Broker

₪29,787

1.6% of total

Renovation & Design

₪148,935

8.0% of total

Furniture & Appliances

₪44,681

2.4% of total

Mortgage Setup Costs

₪22,340

1.2% of total

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“Adesco provided the perfect solution for our home purchase in Israel. They were kind, quick, and efficient, and helped us make this a very smooth process.”Asaf Paran, Homebuyer

Disclaimer: The information provided herein is based on general cases and costs. Actual costs may vary significantly and must be reviewed with your lawyer and other professionals.

Common questions

Israel Property Costs: Frequently Asked Questions

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