\ud83d\udcbc Taxation of property income in Israel: What you need to know when renting a property
\nInvesting in real estate in Israel is attracting more and more French, Swiss, Belgians or Canadians. But beyond the purchase, one question often comes up: how is rental income taxed in Israel?
\nHere’s a simplified guide to understanding the taxation of rental income received in Israel, whether you’re a resident or non-resident.<\/p>\n
\ud83d\udd39 1. Long-term residential rental: several tax options
\n\u2705 Option 1: Partial exemption (revised annual threshold)
\n– If you rent a property for residential use, and the monthly rent does not exceed approximately 5,471 ILS (2024 figures), you are tax-exempt.
\n– If you exceed this threshold, only a portion remains exempt, and a progressive tax may apply to the excess.
\n\u2705 Option 2: 10% flat-rate tax
\n– You can opt for a flat-rate tax of 10% on gross rental income, with no deductions for expenses.
\n– This option is simple, fast and advantageous, especially for non-residents.
\n– It only applies to long-term residential rentals.<\/p>\n
\ud83d\udd39 2. Short-term furnished rental (Airbnb, seasonal).
\n– This type of rental is considered a commercial activity.
\n– It is necessary to register as self-employed (\u201cosek\u201d) and declare VAT if income exceeds approximately 120,000 ILS\/year.
\n– Net income is taxed according to the progressive scale (up to 50%).
\n– Actual expenses (depreciation, maintenance, loan interest, etc.) are deductible.<\/p>\n
\ud83d\udd39 3. Non-residents: a few details
\n– As a foreign investor, you can benefit from the same tax regimes as Israelis.
\n– But beware: you do not benefit from personal allowances (such as the child tax credit).
\n– A tax treaty between your country of residence (e.g. France, Belgium, Canada) and Israel can avoid double taxation.<\/p>\n
\ud83d\udd39 4. VAT: when does it apply?
\n– Residential rental: exempt from VAT.
\n– Tourist or commercial rental: subject to VAT (17%) as soon as your activity exceeds the regulatory threshold.<\/p>\n
\ud83e\uddfe What do I need to know?
\nType of rental Possible tax regime VAT?
\nLong-term residential Partial exemption OR 10% flat-rate No
\nFurnished short-term \/ Airbnb Progressive taxation + pro obligations Yes (17%)
\nCommercial Progressive taxation Yes<\/p>\n
\ud83d\udc69\u200d\u2696\ufe0f Expert advice
\nBefore choosing your tax regime, remember to :
\n– Check the thresholds, which are updated every year.
\n– Simulate both options (flat-rate vs. actual).
\n– Surround yourself with a certified public accountant in Israel, especially if you’re a non-resident.<\/p>\n
\ud83d\udcde Are you an investor or future ol\u00e9?
\nAt Israel-Renovation, we put you in touch with trusted tax experts and accompany you every step of the way: purchase, renovation, rental, administrative management.<\/p>\n","protected":false},"excerpt":{"rendered":"
\ud83d\udcbc Taxation of property income in Israel: What you need to know when renting a property Investing in real estate in Israel is attracting more and more French, Swiss, Belgians or Canadians. But beyond the purchase, one question often comes up: how is rental income taxed in Israel? Here’s a simplified guide to understanding the<\/p>\n","protected":false},"author":1,"featured_media":5607,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126],"tags":[],"class_list":["post-5610","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\n