Praise due to inflationary sum
- Buying an apartment in Israel
If there was appreciation as a result of the sale of the apartment the seller must pay appreciation tax unless he has received an exemption.
Appreciation is created because of two separate components: real appreciation and appreciation due to an inflationary amount (section 47 of the Real Estate Tax Law). It is defined as the part of the appreciation equal to the amount where the balance of the adjusted purchase value exceeds the balance of the purchase value.
The inflationary amount is divided by the debtor at a rate of 10% from the date of purchase of the same dwelling sold until the end of 1993. From 1994 until the day of sale the inflationary amount is tax-exempt.