Rental income tax: which option pays least?
Israel lets landlords choose between three ways of taxing residential rent. Enter your figures and see which one leaves you the most.
A personal tool, not professional advice. These are calculation tables I built for my own decisions and now share freely. Please check every figure and assumption yourself before relying on it.
Your income
Total from all residential apartments you rent out
Salary or business income before tax, sets your marginal rate
2.25 for a resident man, 2.75 for a woman, more for children and olim
Deductions
Only used in the marginal-rate option.
Repairs, insurance, agent fees, mortgage interest
2% a year can be deducted as depreciation
Exemption
No tax up to ₪5,654 a month. Above that the exemption shrinks shekel for shekel, and the rest is taxed at your marginal rate.
- Taxable income
- ₪32,304
- Effective rate
- 7.69%
10% flat
10% of the gross rent, no deductions. Paid within 30 days after the end of the tax year.
- Taxable income
- ₪84,000
- Effective rate
- 10.0%
Marginal rate
Rent minus expenses and depreciation, added to your other income and taxed at your brackets.
- Taxable income
- ₪76,000
- Effective rate
- 21.76%
Best option for you
Exemption
Tax per year, by option
These calculators are spreadsheets I originally made for my own use, shared as they are to help you think things through. They give estimates based on the published rates for the current tax year and on the assumptions you enter, and they may contain errors or simplifications. They are not tax, legal or financial advice: check all the information yourself and with a licensed accountant, lawyer or mortgage adviser before making any decision.
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