Many families planning their future in Israel face the same dilemma. They would like to secure an apartment today, but their move to Israel may only happen in a year, two, or even several years from now.

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The question that naturally follows is simple: If we buy today as foreign buyers and pay the higher purchase tax, will we still qualify for the reduced purchase tax benefits once we eventually move to Israel?

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A conversation I have very often goes something like this.
 

A family calls from the United States, England, or Australia. They are excited about Israel and are planning their future here. Sometimes the plan is to make Aliyah. Sometimes the plan is simply to move to Israel and become residents without formally making Aliyah.
 

They tell me they are not moving immediately. Maybe it will be in a year. Maybe two. Sometimes even longer.
 

But they are already thinking about one thing.
 

Buying an apartment in Israel.
 

They want to secure a home now, before prices change or before the right opportunity disappears. But there is one concern that almost always comes up.
 

At the time they purchase the apartment they are not Israeli residents and not Olim, which means they must pay the higher purchase tax that applies to foreign buyers.
 

And quite understandably, the same question usually follows:
 

“If we buy now and pay the higher purchase tax, will we still qualify for the reduced purchase tax benefits if we later move to Israel as Olim or Israeli residents?”
 

In many cases, the answer is yes. However, this depends on meeting several legal conditions and timelines.
 

The purpose of this article is to clarify the rules governing purchase tax benefits under the updated law as of May 2024, both for those who qualify for the Oleh Hadash purchase tax benefit and for those who later qualify for the Israeli residency benefit.
 

Readers who made Aliyah before May 2024 should note that earlier legislation may provide additional or different benefits, and it may therefore be worthwhile to review those rules separately.
 

Two Important Conditions

First, these benefits apply only if the apartment being purchased is the buyer’s only residential property in Israel.
 

Second, there is an important difference between the Oleh benefit and the Residency benefit, and not every buyer will qualify for both.
 

If spouses purchase a property together and only one becomes an Oleh, the benefit may still apply to both spouses’ shares. If there are additional purchasers, the benefit applies only to the spouses’ portion.
 

By contrast, the residency benefit applies only to the purchaser who actually becomes an Israeli resident.
 

The Oleh Hadash Purchase Tax Benefit

Under Israeli law, the purchase tax benefit for Olim Hadashim applies retroactively beginning one year before the person’s first permanent entry into Israel and continues for up to seven years after that entry.
 

The relevant date is not necessarily the formal Aliyah date, but rather the date of the first significant entry into Israel for the purpose of living here on a permanent basis.
 

Determining this date can sometimes be complex. If someone previously lived in Israel for a meaningful period as a student, yeshiva student, or worker, that earlier stay may affect the calculation of the seven‑year eligibility window.
 

Special Rule for New Construction Apartments

When purchasing a new apartment from a developer, sometimes referred to as purchasing 'on paper', the law provides additional flexibility.
 

Because construction may take several years, the one‑year period prior to the qualifying move to Israel may be extended based on the construction timeline. However, the total period allowed before the move to Israel is capped at three years in total, including the original one‑year period.
 

In practical terms, this means construction may effectively delay the move by up to two additional years beyond the original one‑year period, but the total time before the move cannot exceed three years from the date of purchase.
 

Another important condition is that the buyer must receive the Aliyah visa within one year from the date of purchasing the property.
 

The Israeli Residency Purchase Tax Benefit

Separate from the Oleh benefit, Israeli law also provides a purchase tax benefit for buyers who later become Israeli residents.
 

To qualify, the purchaser must become an Israeli resident within two years from the date of purchasing the property.
 

Residency is determined according to the concept of 'center of life'. Spending at least 183 days in Israel is an important indicator, but the number of days alone is not sufficient.
 

The Tax Authority will also consider where the person’s family resides, where children attend school, financial activity in Israel, and employment or business activity in Israel.
 

Key Timeframes Under Israeli Purchase Tax Law