Praise tax principle and purchase tax
- Buying an apartment in Israel
The sale of residential apartment results in two tax events – one an appreciation tax that applies to the seller, and the other a purchase tax that applies to the buyer.
In the sale of a normative residential apartment, taxes such as capital gains tax, property tax, and income tax will not apply.
Appreciation tax as it is called is a direct tax calculated according to the appreciation, or the profit generated by the seller from the sale of the apartment.
In essence, purchase tax is an indirect tax that applies to the buyer embodied as a percentage of the value of the apartment purchased.