Mas Rechisha Discounts for Olim

What Is Mas Rechisha?

When you buy real estate in Israel, you pay a one-time purchase tax called מס רכישה (Mas Rechisha) (literally "purchase tax"). This is separate from the property price, legal fees, and mortgage costs — it is a tax paid directly to the state within 60 days of signing the purchase contract.

For regular Israeli residents buying their first apartment, the tax brackets in 2025–2026 are:

Up to ~1,919,155 NIS: 0%
1,919,155 – 2,276,360 NIS: 3.5%
2,276,360 – 5,872,720 NIS: 5%
Above 5,872,720 NIS: 10%

For a second property or investment property, the rates are much higher (8% on the full amount up to 5.1M NIS).

The Olim Advantage

New immigrants (olim chadashim) receive substantially better mas rechisha brackets. As of 2025–2026, the olim brackets are:

Up to ~1,978,745 NIS: 0% — the zero-bracket is wider than for regular residents
1,978,745 NIS – 6,000,000 NIS: 0.5% — a dramatically lower rate than the 3.5–5% paid by regular buyers in this range
Above 6,000,000 NIS: 5%

In practical terms: for an apartment priced at 3,000,000 NIS, a regular Israeli resident pays approximately 76,000 NIS in mas rechisha. An oleh buying the same apartment pays approximately 10,000 NIS — a saving of ~66,000 NIS. For a 4,000,000 NIS apartment, the saving exceeds 100,000 NIS.

The 7-Year Eligibility Window

The olim discount applies for 7 years from your aliyah date. This gives you a generous window to find the right property, get financially settled, and buy when the time is right. You are not required to rush into homeownership to access this benefit.

Key rules:

The discount applies to the first property you purchase in Israel
You must be buying for residential use (not solely as an investment property, though this is rarely enforced strictly)
The property does not need to be your primary residence — olim can claim the benefit on a property they intend to rent out, provided it is their first purchase
The benefit applies once only, on one transaction within the 7-year window

Retroactive Application: One Year Before Aliyah

One lesser-known rule is that the olim discount can be applied retroactively for property purchased up to one year before your official aliyah date. If you bought an apartment in Israel before making aliyah formally, and you then made aliyah within 12 months of that purchase, you can file an amended mas rechisha declaration and claim the oleh rates retroactively.

This is particularly relevant for people who bought property in Israel while on a visa or pilot trip and subsequently made aliyah. Consult a property lawyer or accountant to process the retroactive claim — there are deadlines and specific procedures involved.

The US has no equivalent national property purchase tax. Real estate transfer taxes exist at the state and local level (0.1–2% of the purchase price), but these are much lower than Israeli mas rechisha rates for non-olim buyers. For American olim, the 0.5% olim rate on properties up to 6M NIS compares very favorably — at that price range, US transfer taxes would be similar or higher. The primary American advantage is the federal mortgage interest deduction, which has no Israeli equivalent.

How to Pay Mas Rechisha

Your property lawyer handles the mas rechisha declaration and payment as part of the purchase process. You do not need to file this yourself. The steps are:

Inform your lawyer that you are an oleh and provide your Teudat Oleh at the start of the transaction
Your lawyer submits a mas rechisha declaration (Form 7002) to the Israel Tax Authority, noting your oleh status
Payment is due within 60 days of signing the purchase contract (chozeh mecher). Penalties apply for late payment
The Israel Tax Authority issues a clearance certificate (ishur mas rechisha) which is required to register the property in your name at the Tabu (land registry)

Without paying mas rechisha and obtaining the clearance certificate, the property cannot be registered in your name — so this is not optional or deferrable.