land taxation puts hundreds of millions of shekels into the state coffers every year. When Sammy sells his horse an apartment on both, the tax burden falls. The level of tax in real estate transactions can reach up to half the value of the transaction, but with proper tax planning, expenses can be minimized. Therefore, it is important to know the types of tax imposed on such transactions.
Praise tax
Praise tax is a tax levied on “praise” which is a capital gain that has been raised due to the “sale” of “real estate right”. The seller is the “debtor” in the praise tax. Simply put – A person bought a property that over the years cost its value and praise, and came to its seller, would be liable to praise the property for making a profit from its sale.
The term sale of a property also refers to the granting of rights to the property and the waiver of them even without financial consideration. For the purposes of the law, a valid memory of things can also be proof of the sale of the property.
A residential apartment sale can be tax-exempt. In any case, it is important that the exemption matter regulate a qualified person in the face of authorities ( Attorney ).
Seller is entitled to receive an exemption for the sale of an apartment subject to compliance with all of the following conditions, which include filing an exemption in a timely manner, the apartment sold meets the definition of “eligible apartment”, The seller and his family unit sold all their rights in the apartment, the seller has a cause of exemption, not one of the reservations applies to the exemption.
“A “residential apartment” shall be deemed to have been completed, and is private and non-business and intended and used for residential purposes and which is not considered a business inventory. If this apartment was used primarily for residential use, the sale would be taxed.
Eligibility to be exempted from paying a conditional tax on one of the following criteria:
Exemption from one sale to four years
A seller is entitled to an exemption if he has not sold in the four years prior to the sale in question another residential apartment with some tax exemption. Some exemptions are not taken into account such as selling as a gift to a child or spouse of a gift provider as well as in certain circumstances related to inheritance.
Single apartment sale
A seller is entitled to an exemption as long as the apartment sold is the only seller’s apartment in Israel and for 18 months prior to this sale he did not sell another apartment. In addition, in the four years prior to this sale, it did not simultaneously have more than one residential apartment, and the apartment sold is not part of an apartment owned by the seller less than 25% of it, And not rented for residential rent before 1997.Sale of inherited apartment
In the sale of a residential apartment, a inherited special exemption is granted by the seller being the spouse of the licensee or his descendants ( including grandchildren or great-grandchildren ) or the offspring’s spouse and prior to his passing was the licensee of Only one apartment and the Morish was entitled to sell the apartment in exemption. Eligibility is considered on the day of sale on the day of special patronage
The resident of Israel is entitled to a one-time exemption from paying a tax of praise for the sale of another apartment provided that he sold his property more than 12 months ago and purchased the year before the current sale, Or purchase a year later an apartment in Israel or the area equal to three-quarters of the value of the two apartments sold and the value of the two apartments sold does not exceed NIS 1.5 million. If the value of the two apartments exceeds this amount, no exemption will be granted for the amount above the ceiling. The value of the two apartments increased by about NIS 2.5 million and no full or partial exemption would be granted. In short if you are rich – pay!Although these are the main points, it is worth examining each matter with the help of an attorney.Sales tax
Sales tax is calculated as a certain percentage of the sales value. This tax is also levied on the seller. This is about 2.5%. The sales tax is levied regardless of the praise tax even if a loss is made in the transaction.
Despite the fixed rate, there are two cases where the tax rate is reduced to 0.8% – when the residential apartment belongs to business inventory and / or when it comes to selling a “qualifying residential apartment” * under certain circumstances. *(See definition above) “Sale value” is the value on the date of sale of the property when it is pledged to be free of any debt or bond designed to secure a debt. “The “value” usually reflects the agreed contractual consideration. However, the Administration may prefer the market value, if it is not convinced that the consideration was determined in good faith and without being affected by the existence of special relations between the parties, then you should not be smart.purchase tax
Purchase tax is levied on the buyer right in real estate Ltd. Rated tax rate. In some cases, such as transferring real estate without consideration between relatives, a reduction in the tax payment can be obtained.
Here, too, there are exemptions that can be exercised.
In principle, the tax level is calculated as follows:The value of the sale forms the basis from which the purchase tax amount is derived by percentages of the sale value. As a rule, the sales value for purchase tax is the same as the value set for the praise tax ( without deduction of expenses ).
As a rule, the tax payment dates are due on the day of the transaction but a rejection can be obtained.
