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.
30
Questions
6
Categories
10y
Tax window
Banking & Daily Finance
5 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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Taxes & Exemptions
6 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 — 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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Pension & Savings
4 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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Housing & Real Estate
5 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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Employment & Work
4 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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Olim Benefits & Insurance
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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Israel has four Kupot Cholim: Clalit (largest), Maccabi, Meuhedet, and Leumit. All provide the same basic health basket. Compare supplemental insurance plans, specialist availability, clinic locations near your home, and English-speaking staff.
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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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