Tax on Selling Property Abroad: How Much You Pay in the Property's Country, How Much in Israel, and How to Move the Money

1How much tax do you pay when selling property abroad?

You pay in two layers: first the tax in the country where the apartment is located, and then capital gains tax in Israel, from which the foreign tax is deducted. Because the credit is limited to the Israeli tax on the same gain, the total burden is roughly the higher of the two taxes: when the foreign tax is low, you pay the difference in Israel, and when it is high, the excess stays in the property's country.

This rule fits most countries, but not all of them: a tax treaty may give exclusive taxing rights to the property's country, and a particular local payment may not count as an "income tax" for the credit. This guide compares the countries and explains how the two tax systems interact. We set out the reporting duties, forms and deadlines in the guide to the Israeli side of property abroad and reporting to the Israel Tax Authority.

2What is the tax on selling an apartment in each country? Comparison table

The table summarises the local tax on an individual who is not resident in that country and sells an apartment owned directly, not through a company. Each row shows when the source was checked. The figures match the site's country selling guides, where you will also find the details, exceptions and examples.

Sources: PwC Worldwide Tax Summaries for each country, the Italian Revenue Agency website and the IRS website, as of the dates in the table. A sale by a company is taxed entirely differently, and in some countries the sale of shares in a company holding real estate is also taxable in the property's country. You will find the full detail for each country in the dedicated guides:

• Selling property in Romania: the 1% or 3% tax and the transaction process
• Selling property in Greece: the capital gains tax suspension and the treaty with Israel
• Capital gains tax on selling property in Cyprus and the new exemptions
• Selling property in Bulgaria and why the exemptions do not apply to Israeli residents
• FIRPTA withholding on selling property in the USA and how to get a refund
• Selling property in Ukraine and moving the proceeds to Israel

3Why can't you compare countries by the tax rate alone?

Because the rate applies to different bases. 1% of the sale price in Romania can be more than 20% of the gain in Cyprus when the gain is small, and less when the gain is large. 23% of the contract price in Ukraine almost always exceeds the Israeli tax on the gain. And with the suspension in Greece, or a sale after five years in Italy, the local tax is zero and the question moves entirely to the Israeli side.

An illustration only, with hypothetical figures: an apartment bought for EUR 150,000 and sold for EUR 200,000, a gain of EUR 50,000. Assume, for simplicity, that in Israel too the real gain is EUR 50,000 and the tax on it is 25%, i.e. EUR 12,500. The calculation ignores indexation, expenses, exchange rates and surtax.

1. Romania, held more than three years: 1% of 200,000, i.e. EUR 2,000. About EUR 10,500 is left to pay in Israel.
2. Bulgaria: 10% of 45,000 (the gain less 10%), i.e. EUR 4,500. About EUR 8,000 is left in Israel.
3. Cyprus, first sale: 20% of 20,000 (the gain less the 30,000 exemption), i.e. EUR 4,000, plus a levy of EUR 800. If only the capital gains tax is creditable, about EUR 8,500 is left in Israel.
4. Italy, sale within five years: 26% of 50,000, i.e. EUR 13,000. This is more than the Israeli tax, so nothing is left to pay in Israel, and EUR 500 of foreign tax goes unused. After five years: no tax in Italy, and in Israel you pay the full EUR 12,500.
5. Ukraine, without an exemption: 23% of 200,000, i.e. EUR 46,000. Nothing is left to pay in Israel, but EUR 33,500 of foreign tax cannot be credited in the year of sale.
6. Greece, in 2026: no tax in Greece, and under the treaty no tax in Israel either. The reporting duty in Israel remains.
7. USA: on closing day EUR 30,000 (15% of the price) is locked up by FIRPTA withholding. The final tax is set only in the US return, and the difference is refunded from there.

4How is the sale of an apartment abroad taxed in Israel, and does mas shevach apply?

Mas shevach does not apply. The Real Estate Taxation Law applies only to rights in real estate in Israel, and an apartment abroad is an "asset" under section 88 of the Income Tax Ordinance. The gain is therefore taxed as a capital gain: up to 25% of the real gain, and for property bought before 2012 on a linear basis, with a rate of up to 20% on the portion accrued until the end of 2011. For the same reason, the Israeli single-apartment exemptions do not apply to an apartment abroad.

As of 2026, a 3% surtax applies above taxable income of ILS 721,560 a year, and a further 2% applies to capital income above the same threshold, and the year of sale may cross that threshold. The sale is reported and an advance is paid within 30 days, and at year end it is included in the annual return. We set out this mechanism in the reporting guide referred to above.

5How does the foreign tax credit work, and when does it not cover all the tax?

The tax paid in the property's country is deducted from the Israeli tax on the same gain, but not beyond it. According to PwC's Israel tax summary, the credit is calculated by type of income, and unused foreign tax can be carried forward to the next five tax years, against tax on income of the same type. It is not refunded in cash. In practice, these are the points that surprise investors:

• Low foreign tax: in Romania, Bulgaria and Italy after five years, most or all of the tax is paid in Israel.
• High foreign tax: in Ukraine, and sometimes in Italy within five years, the local tax exceeds the Israeli tax, and the excess is not refunded.
• Not every payment is an income tax: transfer tax, the 0.4% levy in Cyprus or the military levy in Ukraine may not be recognised for the credit. Check this with your accountant in advance.
• An advance is not a final tax: FIRPTA withholding is an advance. According to professional sources in Israel, the credit is granted for the final foreign tax, which is set only in the US return.
• A different calculation: in Israel the gain is calculated in shekels and under the Ordinance's rules, and local exemptions, such as the Cyprus exemption, are not recognised.
• Proof: without a certificate of the tax paid, such as the notary's receipt in Romania or the Bulgarian tax authority's certificate, it is hard to obtain the credit.

6What does the tax treaty change, and why are Greece and Cyprus different?

In most of the countries in the table, the treaty allows the property's country to tax the gain, and Israel, as the country of residence, also taxes it and grants a credit. This is the case in Romania, Bulgaria, Portugal, Italy, Ukraine and the USA. The treaty with the USA does not exempt from FIRPTA, because gains from real property are excluded in it from the general exemption for capital gains.

Greece is different: under Article 13(1) of the treaty, a gain of an Israeli resident from selling real estate in Greece is taxable only in Greece. As long as Greek capital gains tax is suspended, a direct sale of an apartment may be exempt in both countries. The exemption does not apply to a sale of shares in a Greek company, and it does not exempt from reporting in Israel. Cyprus is different in the opposite direction: it does not appear on Israel's list of tax treaties, so the credit is granted under Israeli domestic law only, with the same limits.

7How do you move the money from selling an apartment abroad to Israel?

By a documented bank transfer to an account in your name, with a file showing the whole chain: how the apartment was bought and with what money, the deed of sale, proof of payment of the tax in the property's country, and the account from which the proceeds are sent. The bank in Israel checks the source of funds, and an organised file sent to your banker before the transfer shortens the review.

• EU countries (Romania, Greece, Cyprus, Bulgaria, Portugal, Italy): as a rule there is no restriction on taking the proceeds out, and delays come from missing documents and source-of-funds checks.
• USA: 15% of the price stays with the IRS until a certificate reducing the withholding is obtained or a refund comes through the annual return. This is planned in the contract, not on closing day.
• Ukraine: under the central bank's martial-law rules, transfers abroad are restricted, and we found no general permission for a non-resident individual to transfer sale proceeds. The money route is checked before signing.
• Timing against Israel: the Israeli advance is paid within 30 days of the sale, sometimes before the money arrives or before the final foreign tax is set. Plan your cash flow accordingly.

8What to do before signing a sale, and how we accompany it

Before listing the apartment, it is worth doing three things: calculating the tax in both countries on the same deal, checking the treaty and what will count as foreign tax for the credit, and building the document file for moving the money in advance. We handle the legal side of the sale, from preparing the documents to the signing, including remote signing by power of attorney. In the property's country we work alongside locally licensed notaries and lawyers, and in Israel we coordinate the reporting, the credit and the timetable with your accountant.

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