As of 2026, residential rent up to ₪5,654 per month is fully tax-exempt in Israel; above the ceiling you choose between a partial exemption, a flat 10% track on the entire income (section 122), or the marginal track (at least 31% under age 60). For example, at ₪6,500 per month the partial exemption is cheapest — about ₪6,294 tax per year versus ₪7,800 on the 10% track.
How is it calculated?
The calculator compares three tracks and highlights the cheapest. Exemption track: up to ₪5,654 per month — zero tax. Between ₪5,654 and ₪11,308 the exemption shrinks: the excess = rent minus 5,654, the adjusted exemption = 5,654 minus the excess, and the remainder is taxed at the marginal rate (at least 31% under age 60). From ₪11,308 per month (twice the ceiling) there is no exemption at all. 10% track (section 122): a flat 10% on the entire gross rent, no expense deduction, payable by 30 January of the following year. Marginal track: tax per the income brackets (at least 31% under 60), but expenses and depreciation are deductible.
Example: at ₪6,500 per month the excess is ₪846, the adjusted exemption ₪4,808, and the taxable part ₪1,692 × 31% × 12 ≈ ₪6,294 tax per year — cheaper than the 10% track (₪7,800). At ₪4,000 per month there is no tax at all, and at ₪8,000 the 10% track wins with ₪9,600 per year. Assumptions: age under 60 (minimum 31% bracket), income from all residential apartments combined, and no expense or depreciation deductions on the marginal track — recognized expenses may change the picture.
Frequently asked questions
How much tax do you pay on rent of ₪6,000 a month in Israel?
At ₪6,000 per month the excess over the ceiling is ₪346, the adjusted exemption ₪5,308, and the taxable part ₪692 per month. At a 31% marginal rate that is about ₪2,574 per year — far less than the 10% track, where the tax is ₪7,200 per year.
What is the 10% rental tax track (section 122)?
A track where you pay a flat 10% on the entire gross rent, with no deduction for expenses or depreciation, in one payment by 30 January of the following year. For example, at ₪8,000 per month the tax is ₪9,600 per year — in that case it is the cheapest track.
I rent out my only apartment and rent elsewhere — is there tax relief?
Yes. Under section 122(f), an owner who rents out their only apartment while renting their own home may, on the 10% track, deduct the rent they pay up to ₪90,000 per year. The deduction reduces the taxable income on which the 10% is calculated.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
