Israel Unveils Major Tax Breaks for New Immigrant Homebuyers
In a significant move to support the influx of new immigrants, the Israeli government has expanded tax benefits for first-time homebuyers moving to Israel. Finance Minister Bezalel Smotrich announced the decision following a vote by the Knesset on Monday. This initiative aims to facilitate the integration of new citizens amid a notable increase in global antisemitism.
Under the revised policy, individuals immigrating to Israel under the Law of Return will now enjoy full exemption from the purchase tax on their first home up to 1.98 million shekels (approximately $530,000). This benefit mirrors the existing exemption provided to all first-time buyers in the country. For properties valued between 1.98 million and 6 million shekels (around $1.61 million), the purchase tax rate for new immigrants is reduced to a mere 0.5%. Transactions exceeding this value will be taxed at the same rate as those for long-standing residents: 8% for deals up to 20 million shekels ($5.4 million) and 10% for higher amounts.
Previously, new immigrants were subject to a 0.5% purchase tax for properties under 1.98 million shekels and a substantial 5% for transactions above that threshold, regardless of whether it was their first home. The new regulations, however, extend these benefits retroactively from the year preceding the immigrant’s arrival and for up to seven years afterward.
For example, under the updated rules, a new immigrant buying a home worth 4.1 million shekels ($1.1 million) would only pay about 10,000 shekels ($2,690) in tax, compared to the 100,000 shekels ($26,900) a veteran citizen would owe. This significant reduction is designed to make homeownership more accessible for new immigrants.
Aliyah and Integration Minister Ofir Sofer applauded the expanded benefits, noting that they would aid many immigrants in settling into Israeli society and encourage further immigration. Sofer emphasized the continued immigration to Israel since the conflict in Gaza began, highlighting the growing interest in moving to Israel.
Avichai Kahane, the ministry’s director-general, echoed Sofer’s sentiments, calling the policy shift a substantial opportunity for families considering immigration to Israel amid rising antisemitism.
Finance Minister Smotrich reiterated the government’s commitment to supporting new immigrants during these challenging times. “Especially during this time, we as a country need to do everything possible to make it easier for new immigrants from around the world to return home. Today, we took another important step for the immigrants and for the State of Israel,” Smotrich stated.
Since the attacks in southern Israel by Hamas on October 7, approximately 22,000 people have immigrated to Israel. Interest in immigration from France, in particular, has surged by over 500%, with nearly 6,500 individuals initiating immigration procedures compared to just over 1,000 in the same period the previous year.
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