Did you know that not everyone who sells a single apartment is exempt from capital gains tax? This pertains to the tax on luxury apartments.

Every property, even if it is the only property owned by the family unit, is subject to capital gains tax if the sale amount exceeds 4,603,000 ILS (as of 2022). These amounts are updated annually.

It’s important to understand that the tax is calculated only on the difference between the exemption amount and the actual sale price. On this difference, one can request to pay a linear tax rate if the property was purchased before 2014.

Additionally, according to a recent ruling by Judge Yardenna Sarory, the exemption cap for luxury apartments applies to the seller, not the property. This means that if two partners (who are not married and not part of the same family unit) own a single residential apartment valued at 9,000,000 ILS, the exemption cap will apply to each of them separately, allowing them to enjoy a full tax exemption on the sale.