D
espite a market slowdown, foreign buyers and new immigrants drove a rebound in Israel's real estate tax revenues in 2024. They paid significantly higher prices for investment properties than veteran Israeli investors, contributing to a 16% increase in purchase tax revenues compared to 2023. Foreign residents played a key role, accounting for 10% of investment apartment purchases but generating 15% of total purchase tax revenue.

    A report by the Israel Tax Authority highlights trends in real estate activity and taxation between 2021 and 2024. The data show a sharp decline in market activity following the outbreak of war in 2023, with purchase tax collections falling 43% and capital gains tax revenues declining 49%. However, signs of recovery emerged in mid-2024, driven by investors and foreign buyers.

    The report notes that prices paid by investors rose significantly, with the median price for an investment apartment increasing 11% in 2023 to 2 million shekels. In the first half of 2024, this figure rose another 14% to 2.3 million shekels. Foreign residents and new immigrants paid substantially higher prices than veteran Israeli investors, with foreign buyers accounting for 10% of investment apartment purchases but generating 15% of total purchase tax revenue.

    The influx of capital from foreign buyers and new immigrants has provided a crucial boost to Israel's real estate market, signaling potential avenues for recovery and growth in the coming years. Despite overall transaction volumes remaining below peak levels, the sector shows resilience, driven by foreign investment.