In brief
There is no special form for buying property abroad, but an Israeli resident who buys property in Romania will almost always become subject to the obligation to file an annual return (Form 1301). The obligation arises from transferring ILS 500,000 or more abroad within 12 months, from family foreign assets worth ILS 2,086,000 or more, or from income from abroad such as rent. A sale is reported separately within 30 days.
Key takeaways
- 1The obligation to file a return does not depend on profit: it arises from the transfer of money, from the value of the assets abroad and from the income.
- 2A transfer of ILS 500,000 or more abroad within 12 months requires a return for the year of the transfer and for the following year.
- 3Family foreign assets worth ILS 2,086,000 or more on any day of the year cancel the exemption from filing (amount for the years 2023-2026).
- 4Rent from Romania is detailed on Form 1324, which is also where a credit for the Romanian tax is claimed under the marginal tax route.
- 5The sale of the property is reported on Form 1399 within 30 days, with an advance payment, and not only in the annual return.
Does buying property in Romania require reporting to the Israel Tax Authority?
In most cases yes, although not on a form dedicated to the purchase. The purchase usually triggers the obligation to file an annual return (Form 1301), because of the amount of money transferred abroad or the value of the assets held there.
A common mistake is the assumption that anyone who has not profited from the property is exempt from reporting. The law separates two obligations: paying tax and filing a return. You may be required to file a return without paying a single additional shekel of tax, for example in the year in which the money was transferred for the purchase and the property has not yet produced income.
Section 131 of the Income Tax Ordinance determines who must file a return, and the Income Tax (Exemption from Filing a Return) Regulations determine who is exempt and when the exemption is withdrawn. These regulations contain the thresholds relevant to anyone holding property abroad.
A transfer of ILS 500,000 or more abroad within 12 months requires a return for the year of the transfer and for the following year.
What triggers the obligation to file an annual return?
Three separate mechanisms, each of which is sufficient on its own:
- Transferring money abroad. Section 131(a)(5f) requires a return from an individual Israeli resident who transferred ILS 500,000 or more out of Israel during 12 months. The return is filed for the year in which the amount was first transferred and also for the following year.
- Value of foreign assets. Under regulation 3(a)(6), the exemption from filing does not apply to a person who, together with his or her spouse or children under 18, had foreign assets worth ILS 2,086,000 or more on any day of the tax year. This is the amount for the years 2023 to 2026, and regulation 3(a)(7) sets an identical threshold for balances in bank accounts abroad.
- Income from the property. The exemption for foreign income applies only when it is up to ILS 375,000 per year (for the years 2023 to 2026) and an advance tax payment has also been made on it in Israel. Anyone who rents out property in Romania and pays tax only there does not meet the second condition, and therefore in practice files a return.
The foreign-assets threshold is tested at family level and not for each spouse separately, and the test is "on any day" of the year, not on its last day. Property, a Romanian bank account and an investment portfolio abroad are aggregated together.
When buying from a developer in instalments, all the transfers made within 12 months are aggregated for the purpose of the ILS 500,000 threshold, even if each of them is smaller than it.
How is rent from property in Romania reported in Israel?
The rent is included in the annual return and detailed in Appendix D, Form 1324 ("Income from abroad and tax paid on it"). The credit for the tax paid in Romania is claimed on the same form.
In Israel there are two routes for the rent. Section 122A allows a tax of 15% on the rent, with a deduction for depreciation only and without a credit for the Romanian tax. The alternative is tax at the progressive rates, with a deduction of expenses and a credit under the tax treaty. Anyone claiming depreciation on the property also attaches Forms 1342 and 1343 to the return.
Reporting table: event, form and deadline
| Event | What is filed in Israel | When |
|---|---|---|
| Transfer of ILS 500,000 or more abroad within 12 months | Annual return, Form 1301 | For the year of the transfer and the following year |
| Family foreign assets worth ILS 2,086,000 or more on any day | Annual return, Form 1301 | In every year in which the threshold is crossed |
| Rent from the property in Romania | Form 1301 and Appendix D, Form 1324 | As part of the annual return |
| Claiming depreciation on the property | Forms 1342 and 1343 | Attached to the annual return |
| Sale of the property | Notice of sale and tax calculation, Form 1399 | Within 30 days of the sale |
| A person claiming not to be an Israeli resident | Residence declaration, Form 1348 | Attached to the annual return |
What is reported when the property is sold?
A sale is reported within 30 days and not at the end of the year. The sale of property abroad by an Israeli resident is a capital gains event under the Income Tax Ordinance, not under the Real Estate Taxation Law, and section 91(d)(1) requires a return to be filed within 30 days of the date of sale and an advance payment equal to the tax to be paid.
- The tax rate on an individual's real capital gain is up to 25%.
- Anyone whose taxable income exceeds ILS 721,560 (for the years 2024 to 2027) may also pay surtax: 3%, plus a further 2% on income from capital sources.
- The tax paid in Romania, 3% or 1% of the transaction value, is deducted from the tax in Israel, up to the amount of the Israeli tax.
- At the end of the year, the sale is also included in the annual return.
And what should be kept from the Romanian side?
The confirmation of tax payment in Romania. An individual who rents out property files there the "single declaration" (Declarația unică, the annual return of individuals to ANAF), and the general deadline for filing and payment is 25 May. Without the Romanian payment confirmation, a credit cannot be obtained in Israel, so it is advisable to file it together with the annual return.
Which mistakes keep recurring?
- "I did not make a profit, so there is no return." The transfer alone, above ILS 500,000, requires a return for two years.
- "The property is registered in my wife's name." The foreign-assets threshold is tested at family level.
- "I paid tax in Romania, that is enough." In Israel you report in any case; the treaty prevents double taxation, not double reporting.
- "I will report the sale at the end of the year." The law requires reporting within 30 days.
What to do before signing and how we assist
Proper preparation starts before the first transfer: build a payment schedule, mark which tax year each transfer falls into, and keep transfer confirmations, contracts and Romanian tax payment confirmations in one file. We help organise the documents on the transaction side and coordinate the timeline of the reports with the accountant in Israel. The acts in Romania itself, such as signing and registration, are carried out by notaries and lawyers holding a local licence.
What is stated here is general information as of October 2026 and is not tax advice for a specific case. The thresholds are correct for the tax years stated and may be updated, and filing deadlines are set each year. Before filing, consult an accountant or a tax adviser.
Frequently asked questions
Must the purchase of property in Romania be reported to the Israel Tax Authority?
There is no form dedicated to the purchase, but in most cases the purchase requires an annual return: a transfer of ILS 500,000 or more abroad within 12 months requires a return for the year of the transfer and the following year, and family foreign assets above ILS 2,086,000 cancel the exemption from filing.
On which form is rent from property in Romania reported?
In the annual return, Form 1301, and in Appendix D, Form 1324. Form 1324 also details the tax paid in Romania in order to obtain a credit under the marginal tax route.
When is the sale of property in Romania reported?
Within 30 days of the date of sale, on Form 1399, together with an advance payment. At the end of the year, the sale is also included in the annual return.
Are a spouse's assets counted towards the ILS 2,086,000 threshold?
Yes. The regulations examine the foreign assets of you, your spouse and your children under 18, on any day of the tax year.
What happens if I did not file a return?
Failure to file on time may result in fines and a best-judgment assessment. Anyone who missed a year can approach an accountant and correct it on his or her own initiative, before the Authority approaches them.
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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.