On June 5, 2011 the real estate taxation law has been amended in regards to the capital gain tax exemption one is entitled for upon selling an acknowledged apartment. The following bulletins are the highlights of those amendments.
- A seller of an apartment will be entitled for capital gain tax exemption while selling an apartment which is not an acknowledged apartment (according to the fifth chapter 1 to the real estate taxation law), since it was not used as an apartment as demanded by the law, as long as the apartment will be adjusted for residential conditions, be used for residential purposes for two years at least after the selling and that the exceeding permit for the apartment will be canceled.
- A seller of an acknowledged apartment which who owns more than one residential property in Israel and the region, will be entitled for capital gain tax exemption for the period of which he owned a number of properties, for one apartment only for any given time period by his choice at the time of the property sale, and the remainder properties one owned at that period will be taxed for that period at the time of their sale.
- When selling an acknowledged apartment which was acknowledged to the 31.12.2012, the time period of which one must pay capital gain tax on will not include the period of the property acquisition until the coming of this amendment to force.
- When selling an acknowledged apartment which was not acknowledged on the 31.12.2012 the taxable gain period will include the period of the property acquisition until the determine date.
- Article 49(E) will be amended in such a way that capital gain tax exemption will be given to an apartment seller not more than once according to the following terms:
- The seller has sold one\two apartments within 12 months prior to the selling.
- The gain for the prior selling with an addition to the relevant apartment being sold did not exceed 2.2 million NIS (New Israeli Shekel).
- The seller acquired a year prior to the selling or will acquire in the following year another apartment in Israel or in the region, in total worth of 90% at least of the total earnings, and that the acquired apartment will be the only one in the seller ownership for six years at least from the day of purchase or from the day the apartment was sold (according to the latter).