What Is Mas Shevach (Capital Gains Tax) in Israel?

Mas Shevach (מס שבח) is Israel's capital gains tax, paid by the seller when a property is sold, calculated on the appreciation in value between purchase and sale. It's the mirror image of Mas Rechisha, which the buyer pays.

Israeli residents selling their only home can often qualify for a full exemption once every 18 months, subject to conditions. Foreign owners and investors are generally taxed on the real gain, with the rate and available deductions depending on when the property was purchased and how it was used.

Why it matters for a buyer: even though it's a seller's tax, Mas Shevach matters to you too — it can affect a seller's negotiating flexibility on price and timing, and it's worth understanding before you eventually sell the property yourself. Keep every purchase-related receipt and improvement invoice, since they reduce the taxable gain later.

Source: Land Taxation Law (Appreciation and Acquisition) 5723-1963; Israel Tax Authority (רשות המסים)