A change contained within the 2026 state funds might imply a considerable curiosity in capital positive factors tax for sellers of funding properties. The surtax on excessive incomes, which was raised from 3% to five% final yr for passive revenue, will now additionally apply to positive factors on the sale of properties to which capital positive factors tax applies.
The annual revenue threshold above which the surtax turns into payable is NIS 721,560 this yr. The speed is 3%, however within the 2025 funds the speed was raised to five% on passive revenue (from dividends, curiosity, rents, and so forth).
For 2026, the Ministry of Finance proposes to incorporate positive factors on the sale of properties that aren’t exempt from capital positive factors tax within the calculation of revenue for the needs of figuring out legal responsibility to the surtax. To this point, this has utilized solely to properties bought for greater than NIS 5.382 million. Because the capital acquire on the sale of a house will be within the a whole bunch of hundreds of shekels, or much more, it might convey a really massive portion of an individual’s annual revenue inside the scope of the surtax.
Within the case of an individual who owns just one residence, the sale of that house is exempt from capital positive factors tax (except the gross sales worth is above NIS 5.008 million), and such instances aren’t affected by the brand new surtax guidelines.
The principle influence will probably be on individuals who personal a couple of residence. When one among these properties is bought, the capital acquire will probably be included within the vendor’s annual revenue for the calculation of legal responsibility to surtax. The quantity above the brink will probably be liable to the extra 5% tax.
Adv. And CPA Dorit Binyamini of Meir Mizrahi & Co. factors out that for sellers for whom, below the capital positive factors tax guidelines, the efficient charge of tax on the acquire on the sale of an funding residence could also be as little as 5%, the surtax might double their tax invoice. Tax planning can, nevertheless, keep away from the surtax or cut back its influence. Within the case of a pair, one methodology prompt by Binyamini is to file separate assessments and cut up the proceeds of the sale of a house between the 2 of them, so that every takes benefit of the exempt quantity.
In accordance with Ministry of Finance estimates, the hike within the surtax charge yielded NIS 1 billion in tax income in 2025, and can add an additional NIS 500 million in 2026. The extension of the surtax to positive factors of the sale of funding properties is anticipated to yield NIS 420 million initially, and NIS 500 million yearly when absolutely carried out.
The Ministry of Finance tried to introduce the change within the 2025 funds however it was eliminated by the Knesset Finance Committee below Moshe Gafni. Now that Gafni is not chairperson of the Finance Committee, and except there are additional surprises, the brand new surtax rule will come into impact as soon as the 2026 funds is handed.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on December 8, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
