A guide for sellers
What does it cost to sell an apartment?
Between the sale price and the sum that reaches your account there is a list of costs. Here they all are, so that you can plan ahead and not be caught out along the way.
This guide describes Israeli law and practice as they apply to residential property. It is a translation provided for convenience: the Hebrew version is the binding text, and prevails wherever the two differ. Nothing here is legal, tax or financial advice — rules and figures change, and your own case may turn on details this guide does not cover.
Many sellers plan their next purchase around the sale price, and discover too late that the sum left over is smaller. The list below is ordered as the costs arise in the process.
1. Brokerage commission
Set in the agreement and normally payable only if a sale takes place, plus VAT (מע״מ, maam). It is worth confirming in writing exactly when it becomes payable and what happens if a transaction falls through after signing.
2. Lawyer
Legal representation is not the place to economise. The seller’s lawyer handles the agreement, the securities, the removal of charges and the transfer of rights. The fee is usually set as a percentage of the transaction value, sometimes with a floor in shekels, plus VAT.
3. Capital gains tax on real estate
A tax on the real gain from the sale (מס שבח, mas shevach) — the difference between the sale price and the purchase price, less recognised expenses such as renovations, commissions and financing costs.
The rate of tax for an individual stands at 25% of the real gain.
Exemption for a single apartment — section 49b(2) of חוק מיסוי מקרקעין (Chok Misui Mekarkein, the Land Taxation Law) grants an exemption on the sale of a person’s single residential apartment, provided it is a דירת מגורים מזכה (dirat megurim mezaka, a qualifying residential apartment) — a term defined in the law, which requires among other things residential use for most of the period. The exemption is subject to further conditions, including holding the apartment for at least 18 months, and not having sold another apartment under this exemption in the preceding 18 months.
The exemption ceiling stands at ₪5,008,000 as at 2026, and has been frozen until the beginning of 2028. Above it, the proportionate part of the gain is taxable.
There are many exceptions — inherited apartments, foreign residents, and the beneficial linear calculation (חישוב לינארי מוטב, chishuv linari mutav) on gain accrued before 1.1.2014. In addition, on the sale of an apartment worth more than roughly ₪5.38 million a surtax (מס יסף, mas yesef) may also apply — this is a separate threshold from the exemption ceiling. The figures are updated from time to time, so it is worth checking the current position with a tax adviser or a lawyer before counting on an exemption.
4. Betterment levy
A payment to the local planning committee (ועדה מקומית, vaada mekomit) on the increase in the value of the property following approval of a plan, a relief or a non-conforming use (היטל השבחה, hetel hashbacha). It is paid on realisation (מימוש, mimush) — that is, on sale — and is imposed on whoever owned the property when the enhancing plan was approved, usually the seller. It is generally half of the betterment.
Exemptions and reliefs exist — among them residence in an apartment of limited area — so it is worth checking eligibility before assuming the levy applies.
This is the cost most sellers do not expect. You can obtain a betterment levy assessment from the local committee even before putting the apartment on the market, and so know in advance.
5. Paying off the mortgage
Beyond the outstanding balance itself, there may be early repayment fees. On fixed-rate loans these can reach significant sums. You can ask the bank for a payoff balance confirmation (אישור יתרה לסילוק, ishur yitra lesiluk) and see the exact figure in advance.
6. Incidental costs
- Preparing the property — paint, small repairs, clearing out and cleaning.
- Moving home — removals, storage if there is a gap between the dates, and installations in the new home.
- Interim rent — when the vacating date does not line up with moving into the next apartment.
- Fees and certificates — a land registry extract (נסח טאבו, nesach tabu), municipal certificates, tax certificates.
- Building committee and municipal rates (ארנונה, arnona) — clearing debts up to the handover date.
How to work out what is left
The formula is simple, and it is worth filling it in on paper before you start:
The sale price, less the outstanding mortgage and repayment fees, less capital gains tax and betterment levy, less brokerage commission and lawyer, less moving and preparation costs — that is what is left.
If the result is smaller than you expected, it is better to know now and not after you have signed on the next apartment.
Two notes
Not every cost is known in advance — betterment levy and capital gains tax require an individual examination. It is worth starting it early.
Saving on one cost can cost you more. Giving up good legal representation or serious marketing saves thousands and may cost tens of thousands in the final price or in legal risk.
The information in this guide is general and does not constitute tax advice or legal advice. Tax amounts and exemption ceilings are updated from time to time. Before making decisions it is worth consulting a professional.
Would you like to know what the figures say about your own property?
Book a consultation