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The entering into of a real estate transaction will usually be accompanied by a tax liability.
The “Real Estate Taxation” Department specializes in the many and varied taxation issues that are expected to apply upon entering into a real estate transaction. Therefore, complete familiarity with the various tax issues is required.
The most common taxes in the field of real estate are: Appreciation tax, ILA (Israel Land Authority) taxes and purchase tax.
Our firm offers the advice and guidance of a real estate appraiser in the process of filing an objection to ILA assessments and exemption from appreciation tax under section 49G. In addition, our firm prepares an estimate of the anticipated tax so that the vendor can prepare for it economically in the optimal way for him before entering into the transaction.
The subject of real estate taxation is one of the principal areas of work undertaken by the real estate appraiser, who is required to be completely familiar with it.
The most common taxes in the field of real estate are: Appreciation tax, ILA (Israel Land Authority) taxes and purchase tax.
Appreciation Tax
Many property owners are unaware of the fact that upon selling their property, they shall have to pay taxes.
Section 49G of the Land Taxation Law stipulates that a first residential apartment is exempt from tax, however, in a considerable number of cases, especially where detached houses are being sold and the value of the property consists of the constructed area and the balance of unutilized construction rights, the balance of the construction rights must be examined., since the Law grants an exemption from payment of appreciation tax on the unutilized construction rights.
The complexity of the capital gains tax makes it difficult for property owners to understand how much tax they shall have to pay. It may be said that this is in fact a section which facilitates a reduction in the tax payment, since tax shall not be charged on unutilized rights.
Our firm offers the advice and guidance of a real estate appraiser in the process of filing an objection to an exemption from appreciation tax under section 49G. In addition, our firm prepares an estimate of the anticipated tax so that the vendor can prepare for it economically in the optimal way for him before entering into the transaction.
What is an improvement levy?
The improvement levy is a mandatory charge which the owner of the title to land is required to pay to the Local Committee, which approved a building plan and in doing so brought about an increase in the value of the land.
The improvement levy is only payable to the Local Committee if the value of the land increased as a result of one of the following:
– Approval of an urban building plan
– Approval of a concession
– Approval of an irregular use
The date for payment of the improvement levy is “the date on which the rights are realized”, meaning:
– Upon the sale of the rights (other than a transfer mandated by law or a gratuitous transfer between relatives).
– Upon the receipt of a construction permit which would not have been obtainable had the plan not been approved.
– The actual date of use.
Our firm offers the advice and guidance of a real estate appraiser during the process of filing an objection to the improvement assessments received from the Committee. In addition, our firm prepares an improvement levy estimate so that the vendor can prepare for it economically in an optimal way before entering into the transaction.
The subject of real estate taxation is one of the principal areas of work undertaken by the real estate appraiser, who is required to be completely familiar with it.
The most common taxes in the field of real estate are: Appreciation tax, ILA (Israel Land Authority) taxes and purchase tax.
ILA taxes
In a large number of cases, the entering into of a real estate transaction involving a property owned by ILA (Israel Land Authority), entails high and sometimes even unexpected taxation.
The calculation of payments and charges to ILA is one of the most complex areas which a real estate appraiser contends with in his work and includes, inter alia, renewal of the lease contracts, permit fees, change of zoning and utilization, usage fees, consent fees, conferring of ownership, etc.
Our firm offers advice and guidance from an appraiser regarding the procedure for filing an objection to ILA’s assessments. In addition, our firm provides an estimate of the payments expected, so that the vendor can prepare economically in the optimal way for him before entering into the transaction.
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