2026–2027 Purchase Tax Brackets: Why They Are Frozen Until January 15, 2028

No. The 2026 purchase tax brackets are the same brackets that applied in 2025, and they will remain in effect for purchases through January 15, 2028. The Economic Efficiency Law canceled the annual index-linked adjustment for tax years 2025 through 2027 in order to meet budget targets. An individual Israeli resident purchasing a sole apartment is therefore exempt only up to NIS 1,978,745, the amount set on January 16, 2024. The January 2028 update will also not include the frozen years.

• Freeze period: January 16, 2025 through January 15, 2028.

• Sole apartment of an individual Israeli resident: no tax up to NIS 1,978,745, 3.5% up to NIS 2,347,040, 5% up to NIS 6,055,070, 8% up to NIS 20,183,565, and 10% above that amount.

• Additional apartment or purchaser who is not an individual Israeli resident: 8% up to NIS 6,055,070 and 10% above, for purchases through February 10, 2027 (inclusive).

• Last update: January 16, 2024.

• Next update: January 2028, reflecting only the index increase during 2027.

• Official source: Real Estate Taxation Execution Directive 1/2026.

The amounts have not changed since January 16, 2024. Section 9(c2) of the Land Taxation (Appreciation and Acquisition) Law, 5723-1963 provides for an update on January 16 of each year based on the Central Bureau of Statistics' Owner-Occupied Housing Services Index, and Amendment 104 added the words "except for tax years 2025 through 2027."

The reason is budgetary. According to the joint announcement by the Israel Tax Authority and the Ministry of Finance dated December 16, 2024, the law was designed to enable compliance with the 2025 budget targets. The freeze also applies to income tax brackets, tax credit points, and land appreciation tax exemption ceilings.

For the purchaser, this means higher tax on the same apartment during years in which the index rises. In the January 2024 update, the exempt threshold rose from NIS 1,919,155 to NIS 1,978,745, and according to the Tax Authority's example, the tax on a sole apartment valued at NIS 2,200,000 dropped from NIS 9,830 to NIS 7,744. During the freeze years, this reduction does not occur.

1. December 26, 2024: The law was published in the Official Gazette, effective January 1, 2025.

2. January 16, 2025: The 2024 amounts remained in force instead of being updated.

3. February 10, 2027: The current expiration date of the temporary provision on additional apartments.

4. January 15, 2028: The last day the frozen brackets apply.

What Will Happen in January 2028?

The amounts will be updated, but without making up for the freeze years. With respect to a sole apartment, the law sets the index published on January 15, 2027 as the base index, so the update will reflect only the increase thereafter. The announcement by the Tax Authority and the Ministry of Finance specifies that the change in the index during 2024 through 2026 will not be included in the amounts from 2028 onward.

The freeze applies to anyone purchasing a residential apartment, but it looks different in each track. A sole-apartment purchaser pays according to the five brackets listed above. A new immigrant entitled to the reduced rate under Regulation 12a pays according to different frozen amounts: no tax up to NIS 1,978,745, 0.5% up to NIS 6,055,070, and 8% up to NIS 20,183,565.

For purchase tax on an additional apartment, 8% is charged from the first shekel. The NIS 6,055,070 threshold is frozen, and the rates themselves were set by a separate temporary provision valid until February 10, 2027, so its timeline differs from the freeze.

Not every amount was frozen. In January 2026, the agricultural-holding reduction (NIS 631,335), penalties, and fees were updated. On the seller's side, the ceiling of the land appreciation tax exemption for a sole apartment is also frozen: NIS 5,008,000 through December 31, 2027.

1. Verify whether the purchase qualifies as a sole apartment. The gap is significant: for example, on an apartment valued at NIS 2,500,000, the tax is NIS 20,538 as a sole apartment versus NIS 200,000 as an additional apartment.

2. Do not plan a transaction around an update in January 2027. The sole-apartment brackets will remain the same.

3. For an additional apartment, check the sale date against February 10, 2027. What will apply to a later purchase depends on a decision by the Knesset.

4. File a declaration within 30 days of the purchase date. The penalty for failure to file is NIS 310 for every two weeks of delay.

The tracks and exemptions are detailed on the Land Appreciation Tax and Purchase Tax page. This area is handled at the firm by Adv. Ariel Epstein, a partner at the firm, who trained at the Legal Bureau of the Customs and VAT Division of the Israel Tax Authority.