Client updates /  Real Estate Taxation

A settlement was approved recently within the framework of two class actions, which may result in some taxpayers receiving considerable financial refunds, while specifically re-examining the taxation of additional development expenses. Those entitled to a refund must forward the Refund Documents to the class plaintiff’s attorney within 180 days of the settlement approval date. The ITA will transfer the refund due to each class member within 150 days of the date of receipt of the documents.

The recently published draft bill seeking to reinstate property tax could have a significant impact on dozens to hundreds of thousands of landowners in Israel. Although only a draft bill at this stage, it is advisable to understand the potential changes, whether they affect you, and how to prepare in advance to reduce exposures and avoid surprises.

A recent district court ruling broadened the interpretation of the statutory provisions governing exemptions from land appreciation tax and ruled that transfers of shares of a real estate association as a gift between siblings are exempt from capital gains tax even if the shares were not direct gifts from the parents but originated from land received as a gift from them. The court also prescribed several important procedural rules to improve the protection of taxpayers’ rights vis-à-vis the Israel Tax Authority (ITA).

Israeli tax ruling on the question: The Committee deliberated the North Mall appeal and ruled recently that a “partial cancellation” of a real estate sale transaction is, in fact, a new transaction subject to additional tax

The new year is already heralding significant tax innovations in Israel in general, and in real estate taxation in particular. Following are highlights of the legislative amendments that were approved by January 2025.

Up until now, the Israel Tax Authority interpreted the Real Estate Taxation Law so that spouses who signed a prenuptial agreement and maintained separate property were considered a single family unit for the purposes of real estate tax.