New Immigrants: Your Updated Tax Benefits
Recent tax law amendments provide exemptions for income generated from work and business within Israel up to specific annual ceilings. Additionally, purchase tax relief for immigrants buying a single apartment has been updated.
In recent years, the tax benefits provided to new immigrants (Olim) and veteran returning residents have been significantly expanded. Alongside the well-known ten-year exemption on income originating outside of Israel, new reliefs have been introduced concerning income generated within Israel and the purchase of a single apartment.
Tax Benefits on Domestic Income
Under a temporary order, new immigrants and veteran returning residents who arrived in Israel between November 5, 2025, and December 31, 2026, may be eligible for a tax exemption on salary and business income generated in Israel. The exemption applies to the tax years 2026–2030, subject to the following annual ceilings:
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2026: Up to 600,000 NIS (proportional to the residency period).
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2027 and 2028: Up to 1,000,000 NIS each year.
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2029: Up to 350,000 NIS.
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2030: Up to 150,000 NIS.
This benefit is particularly significant for self-employed individuals and professionals relocating their operations to Israel. However, eligibility depends on the date of arrival and the classification of the income. It is crucial to note that the burden of proving that income was generated outside of Israel lies with the taxpayer, and one should not assume all foreign-received income qualifies as 'foreign income'.
Real Estate Purchase Tax Relief
In accordance with the 2024 amendment to purchase tax regulations, an immigrant purchasing a single apartment (valued up to 20 million NIS) is entitled to an exemption on the portion of the value up to the standard exemption bracket (approximately 1.98 million NIS). For the portion exceeding this bracket up to 6 million NIS, a reduced tax rate of 0.5% applies. Amounts exceeding 6 million NIS are subject to standard tax rates.
Furthermore, new immigrants are entitled to income tax credit points for 54 months from the date of immigration, designed to reduce the tax burden during the initial years of integration.
For those considering immigration or returning to Israel, the timing of the move, business structure, and apartment purchase date can significantly impact the scope of these benefits. It is advisable to conduct thorough tax planning in advance based on individual circumstances.
• This article is in collaboration with the Israeli legal website PsakDin
• Adv. Itay Hacohen specializes in tax law
• ynet is a partner of the PsakDin website
