À la différence des taxes sur les différents bénéfices inclus dans les lois fiscales générales, les taxes pour l’achat de terrains sont soumises à une imposition séparée : The capital gains tax.
The property improvement tax is a tax payable on profits from the sale of real estate or their shares:
- Agricultural land that has become buildable.
- Increase in a construction rate in a residence.
- Change of status of a residence.
- Tama38, elevation of a building.
- Pinouy Binouy, reconstruction of an apartment or house into a building.
- Classic capital gain during a real estate transaction.
- Improvement of the habitat, terraces, parking, surfaces ….
The tax examines the profits upon receiving the consideration of the transaction, in which the amount of tax to be paid is determined. The tax assessment is determined based on variable tax rates.
Today, it is possible to receive various exemptions from the improvement tax and refunds of income tax.
Refund of the capital gains tax
In many cases, it is possible to receive a refund of the improvement tax on the sale of land rights; it is enough to meet one of the criteria allowing for a request to be submitted to the tax administration in order to obtain the right to a tax refund.
According to the case, the tax administration will determine whether this person will have the right to benefit from the exemption, which will significantly reduce the tax payment, which can reach hundreds to thousands of shekels in total.
The applicant will submit a request for reassessment of the capital gains tax settled at the time, even retroactively back to 1955, in order to verify their eligibility.
You can prepare your file with the receipt of the amount paid for the capital gains tax, or through your authentication documents, it will then be possible to locate the case.
It is also important to note that even in the event of the cancellation of a real estate transaction, it is determined, under Article 102, that a manager will return the tax if it is proven that the sale of the land rights for which the tax was paid has been canceled.
Entities entitled to a refund of the improvement tax
The law defines various factors as giving the right to a refund of the capital gains tax. For example, in cases where the capital gains tax is divided between spouses, if the tax on benefits is spread over a long period, and in some cases, the tax can be attributed to one of the spouses in order to maximize the amount of the refund.
The combination of additional factors such as compensatory losses, various deductions, and many others can generate tax refunds.
For example, in the case where a capital loss is offset by a profit, the capital gains tax may be reduced if the tax rate is lower, according to accounting calculations.
Real estate taxes in Israel
Modification of the tax determination for the purpose of a tax refund
This procedure opens the tax assessment and examines whether it can be corrected in light of the changes in the current tax amounts being much lower than those of the past.
The process of buying or selling an apartment is a routine matter, which involves a one-time tax payment called the property improvement tax.
According to the provisions of the law, tax reductions can be obtained in the form of credit if one of the definitions of the section containing the receipt of the exemption is fulfilled.
Due to the complexity of the real estate tax law and the possibility of simultaneously combining the number of refunds and exemptions based on the circumstances and the amount of consideration, it is recommended to consult experienced and expert entities, such as tax advisors, who will be able to maximize the refund based on the specific case.
The most likely cases where it is possible to recover a significant amount of capital gains tax:
- Sale of agricultural land in Israel.
- Sale of land after a change of status in Israel.
- Resale of an office or commercial space.
- Sale of real estate beyond one’s primary residence.
- Purchase and resale of a field or agricultural estate.
- Sale of building land in Israel.
- Liquidation or sale of shares in a real estate company.
- Sale of land after improvement of land rights.
- Inheritance of real estate in Israel.
- Sale of construction rights.
Have your status examined for free here.
Did you pay taxes on the sale of real estate in Israel? The solution to receive back a significant part of the amount, here.
Share this information with your loved ones, so they too can benefit from this means of recovering a lot of money from the state. This law will undoubtedly be amended or limited in time soon.
