The Latest Taxes Ruling the Real Estate World
Whether you are about to purchase an apartment for the first time in your life or you occasionally visit the world of real estate to enjoy a high return, it seems that you already know that taxes are a significant part of the total package. Therefore, if you want to get an up-to-date picture, if you want to learn about the purchase tax that is planned to increase in the coming days for luxury apartments, or if it is important for you to understand once and for all who pays the real estate income tax, you are invited to take a few moments – we are about to dive into a world of levies, taxation and, of course, into a world of many options to tread carefully between the drops.
Everything a buyer, seller, and lessor needs to know in one place
In general, it can be said that if a property (or land) is sold, the seller is required to pay a capital gains tax, and sometimes a capital gains tax is also required. On the other hand, if a business purchases land from a commercial company, it must pay VAT taxation. What else? If you buy a property, you must pay a purchase tax, and if you rent a property, you must pay income tax. So far, everything is simple, but here we will stop to examine a variety of complementary variables. For example, if you give land as a gift, then the long arm of income tax must also be expected. When, then, does income tax remain out of the picture? When it comes to the transfer of land on behalf of a divorce agreement, when it comes to an exchange of real estate, when it comes to the involvement of a receiver, and so on, that is, when it is not a sales transaction.
Some facts about purchase tax
Now that we understand what is paid in which situation, let’s take a closer look at the various taxes, and here we will start with purchase tax. Well, in general, the principle is that the more expensive the transaction, the higher the tax, with some amounts and special situations for which there is no need to pay tax. Also, those who purchase a second apartment are required to pay more, depending on the amount of the purchase. It is worth knowing that the value of the tax changes every year, and as of today there is talk that it will increase significantly, with the aim of calming the crazy price increase in the apartment sector.
The current future of purchase tax in numbers
Why then do people continue to invest in real estate, when taxes bite off significant portions of total profits? Well, there are taxes in parallel channels as well, mainly because as of today, the real estate sector still constitutes the most ideal ground in terms of investment. What will the plan actually lead to? Well, apartments that are expected to cost more than 3 million NIS are expected to lead to a tax ranging from 6% to 7%. Those who are going to purchase a property over 5 million NIS are expected to pay 10% and those who purchase a property over 12 million NIS are expected to pay about 12.5%, with the upper limit being 15%. Conclusion? If you are thinking of closing an expensive deal soon, it is better to do so before the new policy goes into effect.
איך מתחמקים או לפחות ממזערים מס שבח?
רכשתם נכס לפני 5 שנים וכיום הוא שווה הרבה יותר? ובכן אם חושבים על הרווח הגדול שתפיקו כאשר תימכרו את הנכס, היו מוכנים לשלם מס שבח – אלמנט משמעותי בתחום השקעות נדל”ן. מס זה נוגע לעליית הערך שחלה במשך סך התקופה שבה הנכס היה שייך לכם. מכאן שלא פעם אנשים שמבקשים לרכוש נכס אחר עבור מגורים מקבלים החלטה מושכלת לקחת משכנתא ואת הנכס הנוכחי להשכיר ולא למכור, וזאת כדי להימנע מתשלומי מס שבח. אם אין זו אופציה שעומדת על הפרק מוטב לוודא שערך הנכס מחושב נכונה, כלומר יש לוודא שמכניסים למשוואה את סך ההוצאות שהנכס הצריך לצד נתוני פחת. כאן נציין שיש מקרים שבהם ניתן ליהנות מפטור מס שבח, כך שבהחלט שווה לערוך בדיקה מקיפה. מסקנה? אם חושבים שיום יבוא ותימכרו את הנכס, מוטב לשמור את סך הקבלות שרלוונטיות להוצאות שנוגעות לנכס.
Improvement levy and income tax for rental
The improvement levy is required of anyone who owns land that has been developed due to approval by the local committee, but this is only if it is a very specific situation, such as an approval for an abnormal use. What about renting a property? Well, the state considers this a type of income and therefore income tax is also required here. It is worth knowing that there are 3 payment routes, so it is best to examine which one is most profitable for you specifically.
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