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Olim FAQ
The questions every new oleh asks about money.
Practical answers on banking, taxes, pension, housing, work, and benefits, written for newcomers, not translated from Hebrew. Search, skim, or jump to a category.
62
Questions
10
Categories
10y
Tax window
Banking & Daily Finance
7 questions
Yes, and you should. Keeping a foreign bank account makes it easier to manage overseas income, pay bills in your origin country, and transfer money at favorable rates. Some US banks may close accounts of non-residents, so inform your bank proactively.
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Most major banks offer special Oleh packages with fee waivers for the first 1-2 years. Bank Hapoalim, Leumi, and Discount are the largest. Compare their Oleh packages, English-speaking staff availability, and app language support before choosing.
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Hora'at Keva (standing order) is Israel's version of direct debit. Almost every service provider, from Arnona to internet, requires one. You authorize the company to withdraw a set amount from your bank account on a fixed date each month.
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Israeli credit cards let you split almost any purchase into interest-free monthly installments (Tashlumim). When paying, the terminal asks how many payments you want. This is normal and widely used, not a sign of financial trouble.
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Compare currency transfer services like Wise, Revolut, and traditional banks. Timing matters - exchange rates fluctuate. For large transfers (over $10,000), consider spreading across multiple transfers to average out the rate.
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Often, yes, for the conversion itself. Multi-currency accounts usually beat an Israeli bank on the exchange spread and visible fees for routine transfers, which is why many olim keep one alongside their Israeli account. They are not a full replacement: you still need an Israeli bank account for salary, Bituach Leumi, and standing orders. Compare the all-in cost, the visible fee plus the hidden spread, before each transfer.
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Israeli banks charge per action, with a much higher price for anything a teller touches and a low price for app and standing-order activity, plus there is a Bank of Israel basic track that branch staff rarely mention. Your Oleh package waives most of this for one to three years, so the time to renegotiate or move to a fee-light digital bank is just before it expires.
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Taxes & Exemptions
9 questions
New olim are exempt from Israeli tax on foreign-source income for 10 years from their Aliyah date. This covers dividends, interest, rental income from property abroad, foreign pension distributions, and capital gains from foreign-held assets. The exemption itself remains in force, but Olim who became Israeli tax residents on or after 1 January 2026 lost the separate reporting exemption (Amendment 272 to the Income Tax Ordinance, sometimes called the "Milchan Law") and must disclose worldwide income and assets to the Israel Tax Authority each year, even when no Israeli tax is owed. Olim who arrived earlier keep the older reporting exemption for the remainder of their 10-year window. Speak to a bilingual cross-border accountant about your specific situation.
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Yes. US citizens and green card holders must file US taxes regardless of where they live. You will need to file FBAR (FinCEN 114) for foreign accounts over $10,000 and comply with FATCA. The US-Israel tax treaty helps prevent double taxation.
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Olim receive additional Nekudot Zikui (tax credit points) over 42 months: 3 points in months 1-18, 2 points in months 19-30, and 1 point in months 31-42. Each point reduces your monthly tax by about 235 NIS (2026 rates).
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Amendment 272 to the Income Tax Ordinance (effective 1 January 2026 for new arrivals) repeals the long-standing reporting exemption for new olim and veteran returning residents. The 10-year tax exemption on foreign-source income itself is unchanged, but post-2026 arrivals must now file an annual Doch Shenati (tax return) disclosing worldwide income and submit an initial declaration of foreign assets. The Israel Tax Authority will see the full financial picture even where no Israeli tax is owed. This is a reporting and compliance change, not a new tax, and a working relationship with a cross-border accountant becomes near-essential.
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If you have foreign income, US filing obligations, or are self-employed, a bilingual accountant is strongly recommended. For simple salaried employment with no foreign income, your employer handles most tax matters through payroll.
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If you made aliyah before 1 January 2026, both the 10-year tax exemption and the older reporting exemption are preserved for the rest of your 10-year window, and the grandfather clause is automatic and needs no application. If you become an Israeli tax resident on or after 1 January 2026, the tax exemption still applies, but Amendment 272 strips out the reporting exemption from day one: worldwide income disclosure, an initial foreign-asset declaration, and an annual Doch Shenati are required even while no Israeli tax is owed.
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Voluntary disclosure is the route to regularise undeclared foreign income or accounts with the Israel Tax Authority, usually with reduced penalties and without criminal exposure, before the authority finds you first. With the 2026 reporting reform and global information-sharing tightening, olim who were quietly non-compliant during the exemption years should take advice early rather than wait. It is a specialist process, so use a cross-border tax lawyer or accountant.
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It depends on when they were granted and vested relative to your aliyah, and whether you are also a US taxpayer. Equity that vests after you become an Israeli resident is generally Israeli-taxable, often with a portion sourced to your pre-aliyah work, and US citizens face parallel US tax with treaty relief. The sourcing and timing are technical, so model it before a large vest or sale.
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When you cease to be an Israeli tax resident, Israel deems your assets sold and taxes the accrued gain under section 100A. Only the slice of the gain that built up during your Israeli-residence years is taxed, and you can often defer until you actually sell. It is worth estimating before any move so it does not arrive as a surprise.
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Pension & Savings
6 questions
Keren Hishtalmut (Study Fund) is a unique Israeli savings vehicle. Your employer contributes 7.5% of your salary and you contribute 2.5%. After 6 years, you can withdraw the entire amount tax-free for any purpose. It is widely considered the best short-to-medium-term savings tool in Israel.
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Generally, no. Transferring US retirement accounts to Israel triggers immediate US taxation, potential early withdrawal penalties, and you lose the tax-deferred growth. Keep your US retirement accounts in the US and manage them remotely.
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Israeli law requires employers to start pension contributions after 6 months of employment (or immediately if you had a pension at your previous job). The mandatory contribution is 6.5% employee + 6.5% employer + 6% employer for severance.
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Israeli mutual funds and ETFs are classified as PFICs (Passive Foreign Investment Companies) by the IRS, resulting in punitive US taxation. American olim should generally invest through US-based brokerages in US-domiciled ETFs to avoid this.
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Often, yes. A managed Keren Hishtalmut, kupat gemel, or savings policy holds pooled investments that the IRS may treat as PFICs, while mandatory pension funds usually have stronger treaty and treatment arguments. The rules are technical and contested, so a US person should confirm the treatment of each Israeli vehicle with a cross-border accountant rather than assume.
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Self-employed workers in Israel are legally required to contribute to a pension, with minimum rates set on a band of your income, and you also get a Keren Hishtalmut option with valuable tax deductions. Setting both up early is one of the highest-return moves a self-employed oleh can make.
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Housing & Real Estate
6 questions
Olim purchasing their first apartment in Israel receive a significant discount on purchase tax (Mas Rechisha). The discount applies for up to 7 years from your Aliyah date and can save tens of thousands of shekels on a typical apartment purchase.
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Yes. Olim are eligible for a government-subsidized mortgage (Mashkanta Mezukah) with favorable terms. The subsidy amount depends on family size, and you must apply within 15 years of Aliyah. The subsidized portion is at below-market interest rates.
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Arnona is the municipal property tax paid by whoever lives in a property (owner or renter). New olim receive a 90% discount on the first 100 sq meters for their first year. You need to apply at your local municipality with your Teudat Oleh.
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Monthly costs include Arnona (municipal tax), Vaad Bayit (building maintenance fees), home insurance, water, electricity, gas, and internet. Budget roughly 2,000-4,000 NIS per month depending on location and apartment size, on top of your mortgage payment.
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As a new oleh, you can import a car with reduced customs tax (a significant discount). However, factor in shipping costs, Israeli insurance, and whether your car meets Israeli standards. Many olim find buying locally simpler.
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Each carries different risks. A new build from a kablan adds VAT, a bank guarantee, and exposure to currency and timeline drift on a multi-year payment schedule, while a second-hand apartment is quicker and more certain but may need renovation. The right choice depends on your timeline, cash flow, and appetite for delay.
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Employment & Work
5 questions
Yes, but there are tax and social insurance implications. Your income becomes Israeli-sourced once you are a tax resident. You may need to register as self-employed or use a billing company (Atzmai Sachir) to handle payroll and compliance.
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Osek Patur (exempt dealer) is for annual revenue below ~120,000 NIS and does not charge VAT. Osek Murshe (licensed dealer) is required above that threshold and must charge and remit 18% VAT. A newer category, Osek Zair, exists for very small businesses.
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Yes. Self-employed individuals must pay both their own and the employer share of Bituach Leumi contributions. The rate depends on your income level and can be a significant expense. Budget for approximately 16% of your income.
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An Israeli payslip (Tlush Maskoret) shows your Bruto (gross), deductions for income tax, Bituach Leumi, health tax, pension, and Keren Hishtalmut, resulting in your Neto (net). Employer contributions to pension and severance appear separately.
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Sometimes, but it is rarely clean. Once you are an Israeli resident, your work is Israeli-sourced, and staying on a foreign payroll can create a permanent-establishment problem for the employer and leave you with Israeli reporting and Bituach Leumi to settle yourself. Many olim shift to a local employer of record or register as self-employed instead.
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Olim Benefits & Sal Klita
6 questions
Each Kupat Cholim offers supplemental insurance (Bituach Mashlim) that you can join without medical underwriting within 90 days of enrollment. After 90 days, you may face medical questionnaires, waiting periods, or exclusions for pre-existing conditions.
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Olim receive a partial exemption from Bituach Leumi payments for the first year. If you are not working, you pay a reduced minimum rate. Once employed, contributions are deducted from your salary as normal.
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Sal Klita amounts depend on family status: roughly 20,000-30,000 NIS for a single oleh, more for families. The first payment is at the airport, followed by 5 monthly installments deposited directly into your Israeli bank account.
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After the first payment at the airport, the remaining Sal Klita arrives as monthly deposits over roughly the next half year, with the amounts and number of payments scaled to family size. Knowing the schedule lets you line up rent and the first months of expenses against it rather than dipping into savings too early.
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Olim can import personal belongings, one car, and household appliances tax-free within 3 years of Aliyah. There are specific rules for timing and value limits. The car exemption is particularly valuable as Israeli car taxes are very high.
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Open a bank account (bring your teudat oleh and passport), register with a Kupat Cholim, set up a standing order for rent, and start the Sal Klita application process. Don't rush into transferring large sums from abroad.
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Investing & Wealth
6 questions
The usual answer is to invest through a US-domiciled brokerage in US-listed ETFs and funds, which are taxed normally by the IRS, instead of Israeli mutual funds or ETFs that the IRS treats as PFICs with punitive rates. Mandatory pension and Keren Hishtalmut have separate treatment. If you already hold an Israeli pooled fund, take advice before selling.
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For a US citizen, a US-domiciled brokerage that accepts a US person abroad usually keeps you in compliant, low-cost US-listed funds and avoids the PFIC problem. Non-US olim have more freedom and may prefer an Israeli broker for shekel investing. The right setup depends on your citizenship and where your tax exposure sits.
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A sensible default is to capture any employer pension and Keren Hishtalmut match first, then use tax-advantaged Israeli vehicles, then taxable investing in compliant funds, all while respecting your home-country rules if you still file there. The exact order shifts for US citizens because of PFIC and foreign-account reporting.
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Only if you still have US earned income within the IRS limits, since aliyah does not by itself let you contribute. Israel generally respects the Roth as tax-free under the treaty, which makes an existing Roth valuable to keep, but new contributions depend on your US income situation. Confirm with a cross-border accountant.
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Israel does not recognise the special status of a US 529 or HSA, so the tax shelter that works in the US can unravel once you are an Israeli resident, and growth may become taxable here. There are ways to manage each, but they need planning before and after the move rather than being left on autopilot.
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Yes. Self-employed workers must contribute to a pension at minimum rates set on bands of income, and they can also open a Keren Hishtalmut with generous tax deductions. Setting both up is one of the most valuable early moves for a self-employed oleh.
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Insurance & Health
6 questions
The basic basket is funded by your health tax, not a separate premium. On top, you can buy a cheap kupa supplemental plan (shaban) and a dearer private commercial policy, and both are age-rated, so a young couple pays a fraction of what a retiree pays. Most families take basic plus supplemental and add private cover selectively.
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Many olim do not for routine care, since the basic basket and a kupa supplemental plan cover most needs well. A private commercial policy earns its premium mainly for private surgery, choice of surgeon, drugs outside the basket, and serious-illness cover. Decide it as a separate question from the supplemental layer.
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Yes. You can move between the four health funds at set points during the year through Bituach Leumi, and your basic basket entitlement moves with you. The main thing to check before switching is how your supplemental plan and any waiting periods carry over.
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The basic basket cannot turn you away for a pre-existing condition, which is a major advantage of the Israeli system. The supplemental and private layers can apply questionnaires, waiting periods, or exclusions, which is exactly why the early enrolment windows matter so much. Join the optional layers while the windows are open.
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You can usually drive on your foreign license for an initial period, but insurers price and sometimes restrict cover until you convert to an Israeli license and build a local record. Converting promptly and shopping the compulsory plus comprehensive layers separately keeps the cost down.
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Yes. Long-term nursing care sits outside the basic basket, and the kupot and insurers offer it on terms that get harder with age and health, so there are practical windows where joining is far cheaper and easier. It is an easy deadline to miss in the rush of the first year.
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Cost of Living & Budgeting
5 questions
It varies sharply by city. Central Tel Aviv is among the most expensive places in the world for rent, while peripheral cities cost a fraction of that, and groceries, cars, and dining out are generally pricier than many olim expect. Budget by your actual city rather than a national average.
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The lumpy ones: annual or twice-yearly car insurance and rishui (licensing), Arnona, the chagim, school costs, and flights back to family abroad. Olim who set aside a little each month into a sinking fund for these avoid the recurring cash-flow shock when they land.
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Enough to cover the gap between your expected income and your real cost of living through the settling-in period, on top of moving and setup costs, since salaries are often lower than at home and the first months are expensive. Plan it against your target city and family size rather than a round number.
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Compare the all-in cost, the visible fee plus the exchange-rate spread, not just the headline fee. Multi-currency services usually beat a bank on the spread for routine amounts, while a large one-off transfer may warrant negotiating a rate. The hidden spread is where most of the cost lives.
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Common ones include transferring large sums at a bad moment, buying Israeli pooled funds as a US citizen, missing the supplemental-insurance and benefit windows, and underestimating the lumpy annual costs. Most are avoidable with a little sequencing in the first months.
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By Country of Origin
6 questions
The big three are continued US filing (FBAR and FATCA), the PFIC trap on Israeli funds, and keeping your US retirement and brokerage accounts in the US. The US-Israel treaty prevents most double tax, but you stay in the US system for life as a citizen, so plan investing and reporting around that.
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Key items are what happens to your ISAs and pensions after you leave, voluntary National Insurance top-ups to protect your UK state pension, and long-term-residence inheritance tax exposure. Unlike the US, the UK does not tax you on citizenship, so non-residence is achievable, but the details reward planning.
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Yes. Canada applies a departure tax, a deemed disposition of most assets when you cease residency, and you also need to manage residential ties, RRSP and RRIF withdrawals, and the CPP and OAS totalization gap. The timing of the move and of any sales matters a great deal.
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South African olim navigate exchange control and formal emigration, the three-year lock-in on retirement annuities, and the SARS exit process, alongside the South Africa-Israel tax treaty. Moving funds out and accessing an RA both run on their own timelines, so start early.
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French olim weigh the French exit tax on large holdings, the treatment of assurance-vie and PEA wrappers that lose their advantage once you leave, and the France-Israel treaty. Several French tax shelters do not travel, so review them before and after the move.
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Australian superannuation cannot usually be taken out simply because you have left, and Israel may tax it differently from how Australia does, while the Australia-Israel treaty and any CGT on departure also come into play. Treat your super as a long-term cross-border asset to plan around, not to cash out.
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