In brief
In most cases a property in Romania is not counted for "single apartment" purposes in Israel, because the Real Estate Taxation Law counts only apartments "in Israel and the Area". So an Israeli resident who has a property in Romania and no apartment in Israel will benefit from the single-apartment purchase tax brackets, and the same principle applies to the betterment tax exemption. The important exception is someone who has ceased to be an Israeli resident: for them the property in the country of residence does count.
Key takeaways
- 1Section 9(c1c)(4) of the Real Estate Taxation Law defines a single apartment as the purchaser's only apartment "in Israel and the Area". A property in Romania is not counted.
- 2As at October 2026, there is no purchase tax on a single apartment up to ILS 1,978,745, and according to reports the brackets are frozen until 15 January 2028.
- 3For an apartment of ILS 2.5 million, the difference between a single apartment (about ILS 20,538) and an additional apartment (ILS 200,000) is about ILS 179,000.
- 4The betterment tax exemption under section 49B(2) also looks at apartments in Israel and the Area, and requires a holding of at least 18 months.
- 5Someone who has moved to Romania and holds a home there will be treated as having an apartment in the country of residence, and eligibility for the benefits is at risk.
A family that bought a villa in Romania and later plans to buy an apartment in Israel wants to know one thing before it reaches the signing: will the property abroad classify it as the owner of an "additional apartment"? For an average apartment in Israel, this is a difference of hundreds of thousands of shekels in purchase tax.
The answer rests on two tests. The first is the geography of the definition in the law. The second is your residence status on the day of the transaction. We will go through both, and then through the sale side.
First of all: whom does the law count as the "purchaser"?
For single-apartment purposes, the unit examined is the nuclear family: you, your spouse, and unmarried children who have not yet reached 18. A spouse who lives separately on a permanent basis is not part of the unit. All the apartments of all members of the unit are counted together.
- An apartment in Israel registered in your spouse's name alone also takes you out of the single-apartment category.
- By contrast, there is no point in registering the villa in Romania in the name of a child or spouse to "save" purchase tax in Israel, because the property in Romania is not counted anyway. The question of registration in Romania concerns inheritance, the mortgage and the matrimonial property regime.
As at October 2026, there is no purchase tax on a single apartment up to ILS 1,978,745, and according to reports the brackets are frozen until 15 January 2028.
Does a villa in Romania turn the apartment in Israel into an additional apartment?
No, if you are Israeli residents. The definition in section 9(c1c)(4) of the Real Estate Taxation Law (Betterment and Purchase) refers to an apartment that is the purchaser's only apartment "in Israel and the Area". The test is therefore how many residential apartments the family unit has within that territory, and not how many properties it has worldwide. A property in Romania is outside the territory.
There is one reservation, to which we will return below: the benefit is intended for an individual who is an Israeli resident.
How much money is at stake?
The brackets in the table are those presented in the source, as at October 2026. According to a report in the financial press, the Economic Arrangements Law froze them until 15 January 2028.
| Apartment value (ILS) | Single apartment | Additional apartment |
|---|---|---|
| Up to 1,978,745 | 0% | 8% |
| 1,978,745 to 2,347,040 | 3.5% | 8% |
| 2,347,040 to 6,055,070 | 5% | 8% |
| 6,055,070 to 20,183,565 | 8% | 10% |
| Above 20,183,565 | 10% | 10% |
Suppose, for illustration, a purchase in Israel at a price of ILS 2,500,000 by a family that has no other apartment in Israel but has a villa in Romania. On the single-apartment track the first part is exempt, the part between ILS 1,978,745 and ILS 2,347,040 (ILS 368,295) is taxed at 3.5% and yields about ILS 12,890, and the balance of ILS 152,960 is taxed at 5% and yields about ILS 7,648. In total, about ILS 20,538.
Had the property in Romania been counted, the whole amount would have been taxed at 8%, that is ILS 200,000. The gap: about ILS 179,000. This is an illustrative calculation, and the final assessment is made by the Israel Tax Authority on the basis of the declaration filed.
And what if you have moved to live in Romania?
This is where most of the costly mistakes happen, because both benefits, in purchase tax and in betterment tax, are conditional on Israeli residence.
| Benefit | As Israeli residents | As non-residents |
|---|---|---|
| Single-apartment purchase tax brackets | Eligible, if the family unit has no additional apartment in Israel and the Area | Usually at the additional-apartment brackets: 8% up to ILS 6,055,070 and 10% above |
| Betterment tax exemption on a single apartment | Only apartments in Israel and the Area are counted | Only if there is no apartment in the country of residence, and subject to confirmation from the tax authorities there |
In purchase tax there is a relief: someone who became an Israeli resident for the first time, or a long-standing returning resident, within two years of the purchase date also falls within the definition. On the betterment tax side, section 49A(a) grants the exemption to an Israeli resident and also to a non-resident who has no residential apartment in their country of residence. However, the law presumes that a non-resident has such an apartment, until they present confirmation from the tax authority in the country where they are resident that they do not.
For someone who has become a resident of Romania and holds a home there, that home is counted. So anyone planning both a move and a sale of the apartment in Israel should settle the order of steps before the move, not after it.
And what about the betterment tax exemption when you sell the apartment in Israel?
The same geographical principle applies here too. Section 49B(2) exempts from betterment tax the sale of an apartment that is the seller's only apartment "in Israel and the Area", provided two further conditions are met: the apartment was used as a residence for at least 18 months under your ownership, and no similar exemption was used on another apartment in the year and a half preceding the sale.
In other words, an Israeli resident who holds one apartment in Israel and a home in Romania can claim the exemption when selling the apartment in Israel, and the home in Romania will not stand in their way, provided they meet the other requirements.
A sale of the home in Romania is a different story altogether: Romania charges 3% or 1% of the transaction value on it, depending on the holding period, and in Israel it is reported under the Income Tax Ordinance.
Does this mean the Israel Tax Authority is not interested in the property?
Far from it. For purchase tax and betterment tax the property is not counted, but Israeli residents are liable to tax on their income from anywhere. Rent from the home in Romania, a gain on its sale, and even the transfer of funds for the purchase may lead to an obligation to file an annual return. These are separate sets of rules, and it is the treaty between Israel and Romania that prevents double taxation of the income.
What to do before signing in Israel, and how we help
- Draw up a list of the apartments in Israel and the Area of the whole family unit, including the spouse and minor children.
- Examine your residence status on the day of purchase according to the centre-of-life test.
- Keep the documents of the transaction in Romania, because they will be required in other reports.
- If a move is on the table, decide in advance in which order you sell, buy and move.
- Inform the lawyer filing the declaration in the Israeli transaction about the property in Romania, even when it is not counted.
We accompany Israeli buyers in transactions in Israel and abroad and coordinate between the two sides, so that a decision taken in Romania does not turn into a surprise in Israel. Acts under Romanian law are carried out by a notary and by lawyers licensed in Romania.
The above is general information and is not legal or tax advice. The tax brackets presented may change. The question of residence and eligibility for the exemption depends on the circumstances of each family, so before a transaction in Israel it is advisable to consult a lawyer or accountant who deals with real estate taxation.
Frequently asked questions
Is an apartment in Romania considered an additional apartment for Israeli purchase tax purposes?
No, as long as you are Israeli residents. The law defines a single apartment as the purchaser's only apartment in Israel and the Area, so a property in Romania is not counted.
I have an apartment in Israel and I am buying a villa in Romania. Will I pay purchase tax in Israel?
No. Israeli purchase tax applies to the purchase of real estate in Israel. In Romania there are local purchase costs, such as the notary, registration and, for a new apartment, VAT, but not Israeli purchase tax.
I moved to live in Romania and bought an apartment in Israel. What is the tax?
A non-resident is usually not entitled to the single-apartment brackets, and will pay 8% up to ILS 6,055,070 and 10% above. There is an exception for someone who becomes an Israeli resident for the first time or a long-standing returning resident within two years of the purchase.
My spouse holds an apartment in Israel. Can I buy as a single apartment?
No. Spouses, except a spouse living separately on a permanent basis, and minor children are deemed a single purchaser, so your spouse's apartment in Israel counts for you too.
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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.