The three tracks — 2026
| Track | How it works | Best when |
|---|---|---|
| Exemption | Full exemption while monthly rent ≤ ₪5,654. Partial exemption between ₪5,654 and ₪11,308. No exemption above ₪11,308. | Lower rents / a single modest apartment |
| 10% flat (Section 122) | 10% of gross rent, from the first shekel. No deductions, no depreciation, no expenses. | Higher rents; simplicity; most non-residents |
| Marginal | Taxed at income-tax brackets after deducting expenses and depreciation. | High expenses / interest / renovations — case-specific |
Exemption ceilings for 2026: ₪5,654 (full) / ₪11,308 (partial cap). Partial-exemption formula: exempt amount = 5,654 − (monthly rent − 5,654). Sources: Israel Income Tax Ordinance §122; residential-rental exemption (Kol-Zchut). Figures update annually — confirm the current-year numbers.
Compare your options — free calculator
How and when to pay (10% track)
- Deadline: the tax is due within 30 days of the end of the tax year in which you received the rent. Late payment adds interest and linkage (indexation).
- How: using the Israel Tax Authority's dedicated form — "Request for payment of tax on income from residential rent." Payment can generally be made without opening a full tax file, if the 10% track conditions are met.
- Annual report: if your rent taxed under the 10% track exceeds ₪375,000 in the year, you must also file an annual return.
What's different for non-residents
- You are taxed in Israel on Israeli-source income — rent from an Israeli apartment is Israeli-source, wherever you live.
- The 10% and marginal tracks are available to non-residents. Eligibility for the exemption track in specific non-resident situations can be nuanced — confirm it for your case.
- A tax treaty between Israel and your country of residence may affect how the same income is treated where you live (credits against US or French tax, etc.). Israel generally taxes the Israeli-source rent first.
- Owning 10+ apartments may be treated as a business (taxed at brackets); 6–10 is examined case-by-case; 5 or fewer typically is not.
Still buying rather than renting out? Non-residents pay higher purchase tax (8% from the first shekel) — estimate it with our Israel purchase tax calculator for foreign buyers.
Ready to file — with a licensed professional
This site is an independent information resource and a free calculator. It is not a tax firm and does not represent taxpayers. When you're ready to file or want advice on your specific situation, the work should be done by a licensed Israeli tax professional (CPA / licensed tax representative / lawyer). Tell us about your case and we'll point you in the right direction.
Get pointed to a licensed professionalFrequently asked questions
Do I have to pay Israeli tax on rent if I live abroad?
Yes. Rental income from an apartment located in Israel is Israeli-source income and is taxable in Israel regardless of where the owner lives. You choose a taxation track (exemption, 10% flat, or marginal). A tax treaty with your country of residence may affect how the income is treated where you live, but Israel generally taxes the Israeli-source rent.
What is the 10% track (Section 122)?
Section 122 lets an individual pay a flat 10% on gross residential rent, from the first shekel, with no deduction of expenses or depreciation. The conditions include that the landlord is an individual, the property is used for residential purposes, and the rental is not a business. The tax is due within 30 days of the end of the tax year.
How does the exemption track work in 2026?
Rent is fully exempt in any month it does not exceed ₪5,654. Between ₪5,654 and ₪11,308 a partial exemption applies, calculated as: exempt amount = 5,654 − (monthly rent − 5,654). Above ₪11,308 per month there is no exemption. The taxable portion under this track is taxed at the individual's rates. Ceilings are updated annually.
When is the tax due?
Under the 10% track, payment is due within 30 days of the end of the tax year in which the rent was received; late payment adds interest and indexation. If income taxed under the 10% track exceeds ₪375,000 in the year, an annual report is also required.
Is this site a tax advisor or accountant?
No. This is an independent information resource with a free comparison calculator. It does not provide personal tax advice, does not represent taxpayers before the Israel Tax Authority, and is not a licensed tax firm. Filing and advice for your specific situation should be handled by a licensed Israeli tax professional.