Updated for 2026 · Linear benefit method
Capital Gains Tax Calculator
Estimate the capital gains tax (Mas Shevach / מס שבח) on the sale of Israeli real estate — including CPI indexation, the linear benefit method for apartments purchased before 2014, the single-apartment exemption (§49b) and recognized deductions. Built for olim, investors and English speakers in Israel.
Purchase & sale details
Affects the linear benefit calculation
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Property type & exemptions
Property type
Single apartment?
Israeli resident?
Was the property rented out (for depreciation)?
Recognized expenses (deductions)
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Expenses must be backed by receipts. The brokerage fee is recognized up to 2% of the transaction value.
Capital gains tax due
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Enter transaction details
Gross gain
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Real gain
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Taxable gain
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Effective rate
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Calculation breakdown
Linear benefit method
Exempt until 1.1.2014Taxed 25% from 1.1.2014
Breakdown
⚠️ Disclaimer: This is an indicative estimate only, based on Israeli capital gains tax rules for 2026. In practice additional parameters apply (change-of-use date, splitting apartments, sales between relatives, inheritance, partial pre-2014 benefit eligibility). Always consult a real-estate lawyer or tax advisor before reporting to the Israel Tax Authority.
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How is capital gains tax calculated?
The three steps that make up the calculation — from the gross gain to the amount actually due
1️⃣
Gross gain
The difference between the sale price and the purchase price. This is the starting point — before indexation and before deductions.
2️⃣
Real gain
Subtract CPI indexation and recognized deductions (renovations, brokerage, legal fees, purchase tax paid). This is the gain you actually pay tax on.
3️⃣
Capital gains tax
25% on the taxable gain for individuals. For a single residential apartment — exempt up to a ceiling (about ₪5 million). For older apartments — the linear benefit method.
Glossary
The terms you must know
Before you sell — here are the key concepts in the world of capital gains tax, explained simply.
Qualifying apartment דירה מזכה
A residential apartment actually used for living (at least 4 of the 8 years before the sale, or 80% of the holding period). Only a qualifying apartment is eligible for the single-apartment exemption and the linear benefit method.
Real gain שבח ריאלי
The true profit on the deal after deducting inflation (CPI indexation) and recognized expenses. This is the amount you actually pay tax on — not the nominal difference between sale and purchase.
Linear benefit method חישוב ליניארי מוטב
A preferential calculation for residential apartments purchased before 1.1.2014. The real gain is split linearly by holding time: the part accrued up to 2014 is tax-exempt; the part from 2014 onward is taxed at 25%.
Single-apartment exemption פטור דירה יחידה §49ב(2)
A seller who owns only one apartment is entitled to a full capital gains tax exemption up to a ceiling of ₪5,008,000 (2026). Above the ceiling, only the excess is taxed. Owning another apartment in the 18 months before the sale disqualifies the exemption.
CPI indexation הצמדה למדד
Adjusting the purchase price for inflation over the holding period, so only the real profit is taxed. Without it, you would be taxed on "inflationary profit" that doesn't exist in purchasing-power terms.
Allowed deductions ניכויים מוכרים
Expenses you can subtract from the gain (with receipts): renovations and improvements, brokerage fee (up to 2%), legal fees, purchase tax paid at acquisition, fees and advisors. Everything you "invested" in the property.
Sale date יום המכירה
The date the sale agreement was signed — not the handover of keys nor the day payment is received. The 60-day deadline for filing the self-assessment with the Tax Authority is counted from it.
Purchase date יום הרכישה
The date the apartment was acquired. For a new build from a developer — the day the contract was signed (not key handover). For a self-built property — the day construction ended. Especially important for the linear benefit calculation.
Gross gain שבח ברוטו
The nominal difference between the sale price and the purchase price, with no adjustment. A starting point only — not the amount you pay tax on. To reach the taxable amount you subtract indexation and deductions.
Depreciation פחת
2% of the property value for each year it was rented out. It must be deducted from recognized expenses (even if you never claimed depreciation on your returns) — "notional depreciation". It affects the gain on rented investment apartments.
Self-assessment שומה עצמית
An online report to the Israel Tax Authority of the transaction and tax due, within 60 days of the sale. The Authority may accept it as-is or issue its own assessment. Late payment means fines and default interest.
Inheritance exemption סעיף 49ב(5)
An exemption for an heir selling an inherited apartment — if the deceased would have been eligible had they sold it themselves, the heir is a close relative (spouse / descendant), and the deceased owned only one apartment. Requires case-by-case review.
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Frequently asked questions about capital gains tax
What is the linear benefit method?
The linear benefit method is a significant tax break for residential apartments purchased before 1.1.2014. The real gain is split linearly over the holding period: the portion accrued up to 1.1.2014 is tax-exempt, and the portion from 1.1.2014 onward is taxed at 25%. So the earlier the property was purchased, the larger the exempt share of the gain.
Who qualifies for the single-apartment exemption (§49b(2))?
An Israeli resident selling their only residential apartment, owned for more than 18 months, is entitled to a full capital gains tax exemption up to a ceiling of ₪5,008,000 (2026). Above the ceiling, the proportional excess is taxed. You must not have owned another apartment in the 18 months before the sale.
What is the difference between gross gain and real gain?
Gross gain = sale price minus purchase price (with no adjustment). Real gain = gross gain minus CPI indexation of the purchase price, minus recognized deductions (renovations, brokerage, legal fees, purchase tax paid). The real gain is the basis for calculating the tax.
Which expenses can I deduct?
The main deductible expenses (with receipts):
- Renovations and improvements to the property
- Brokerage fee — up to 2% of the transaction value
- Legal fees
- Purchase tax paid at acquisition
- Fees, advisors, Land Registry
- Depreciation (if the property was rented — 2% per year)
When is capital gains tax paid?
Within 60 days of the sale date you must file a self-assessment with the Israel Tax Authority and pay the tax. You can request a payment deferral or arrangement. Non-payment on time leads to fines and default interest. The recommendation: consult a real-estate lawyer as soon as the sale contract is signed.
Is there an exemption for inheritance?
Yes, section 49b(5) — an heir selling an inherited apartment is entitled to a capital gains tax exemption if: (a) the deceased would have been eligible for the single-apartment exemption had they sold it themselves; (b) the heir is a spouse, descendant or spouse of a descendant of the deceased; (c) the deceased owned only one apartment before passing. This tool does not handle inheritance — professional advice is required.
What about betterment tax (Heitel Hashbacha)?
Betterment tax (Heitel Hashbacha / היטל השבחה) is a separate municipal levy — 50% of the rise in the property's value due to a planning approval (e.g. added building rights), paid to the local authority. It is distinct from capital gains tax (Mas Shevach) paid to the Tax Authority, and is not calculated by this tool. Check with your local planning committee before selling.
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