Property owners renting residential apartments in Israel must select one of 3 statutory tax tracks for reporting rental income.

3 Statutory Rental Income Tax Tracks:

  1. Full Exemption Track: Monthly rental income up to statutory ceiling (approx 5,654 ILS) is 100% tax exempt.
  2. Reduced 10% Flat Tax Track: Flat 10% tax rate on gross rental income without expense deductions or depreciation.
  3. Marginal Tax Track with Expense Deduction: Taxed according to individual marginal tax rate (minimum 31% unless age 60+), permitting deduction of mortgage interest, maintenance, and building depreciation.

We simulate all 3 tax tracks to determine the most advantageous filing choice for property investors.