Israel’s annual tax revenues from real estate sales declined only slightly from 2019, despite the coronavirus crisis, according to Tax Authority data published Tuesday.
While tax revenues declined during the months while Israel was under lockdown, they were higher during the months after the lockdown was been eased.
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Israel’s main real estate taxes are the betterment tax – a 25% tax on capital gains from real estate sales, except in cases where the owner owned only one home, and had it for at least 18 months, or in cases of inherited homes – and a purchase tax, which is levied at rates from 3.5% to 10% on homes sold for at least 1.75 million shekels.
Tax Authority data shows that real estate tax revenues totaled only 428 million shekels for September, a 21% decrease from September 2019. This is apparently due to the change in purchase tax for real estate investors – people who own more than one home – it dropped from 8-10% to 5-10% in July.
Israel saw purchase tax collections drop starting in April, and there was a significant drop in July, but the figure for August was higher than for the previous year, despite the lower tax rate for investors. In September, purchase tax collections were down 21% from the previous year.
Betterment tax collections declined by 31% from the previous year in September, and totaled 439 million shekels.
In comparison, in August tax collections were slightly higher than in the previous year.
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Over the course of nine months, total real estate tax collections are down only 1.5%, as the strong months mostly offset the months of lockdown.
Betterment tax collection totaled 3.356 billion shekels for the first nine months of the year, a 0.7% increase from the same period last year. Purchase tax collection totaled 5.07 billion shekels, a 3% decrease from the previous year.
In total, Israel collected 8.435 billion shekels in taxes from real estate transactions over these nine months, a 1.5% decrease from the same period in 2019.