How to Save on Taxes If You Rent or Rent Out an Apartment
The article explains how landlords in Israel can save on taxes. Full tax exemption applies to income up to 5,654 shekels per month, and a partial benefit up to 11,308 shekels. If the upper threshold is exceeded, the benefits are canceled. Three payment options are provided: exemption, a fixed rate of 10%, or the general income tax scale with expense deductions. Benefits apply only to residential property. For owners of a single apartment who rent housing, a deduction of up to 7,500 shekels is possible. The choice of regime affects future capital gains tax.
The article explains Israeli tax rules for residential landlords. Full tax exemption applies to monthly income up to 5,654 shekels. For income between 5,654 and 11,308 shekels, a partial benefit applies under a complex formula. If income exceeds 11,308 shekels, benefits are canceled, and tax is paid on a general basis. Limits are calculated monthly, and for multiple properties, incomes are summed. Three payment options are provided: full or partial exemption, a fixed rate of 10% on gross income (without expense deductions, declaration by January 30 of the following year), and the general income tax scale with the ability to deduct documented expenses. Benefits apply only to residential property. For owners of a single apartment who rent housing elsewhere, a deduction of up to 7,500 shekels per month from income is provided. Owners of multiple apartments can combine regimes. For landlords over 65 moving to a nursing home, there are preferences. The choice of regime affects future capital gains tax.