Documenting expenses to be recognized for praise tax purposes
- Buying an apartment in Israel
The burden of proof, excluding the payment of purchase tax at the time the apartment was purchased, regarding the expenses incurred by the seller for the purpose of improving the apartment – rests with the seller.
In order for real estate tax authorities to recognize expenses for appreciation tax purposes, the seller must physically present relevant documentation – invoices, agreements, orders, employment contract, and any invoice material relating to the improvement expenses.
It is therefore important to make sure that this documentation is maintained.