Real estate transactions including the purchase and sale of apartments require reporting to the tax authorities and involve an obligation to pay various taxes (though sometimes exemption from tax or a lower rate of tax applies, on a case by case basis).
Tax planning: Thinking ahead
Every taxpayer is entitled to use all provisions of the law to his own benefit to plan the correct and most efficient tax for himself and his circumstances, in order to pay less tax and even to benefit from a complete exemption in law.
“It is the right – and indeed obligation – of tax specialists to plan legal transactions so that there shall not be excess tax. The limitations on tax planning represent an eternal, classic question that are determined by the specific circumstances of each case. A person is entitled to use all the provisions of the law for his own benefit, whether they exempt from or reduce the tax…” (M. Shamgar, then President of the Supreme Court: Civil Proceedings 4639/91 Betterment Tax Department v. Chazon et al).
Therefore, prior to carrying out a real estate transaction you must consult with a lawyer who specializes in real estate and property taxation. Through efficient tax planning it is possible to benefit from reduced tax payments and sometimes also from complete exemptions.
The above is offered as general information only and should not be considered legal advice and/or an alternative to a lawyer and/or the provision of an expert opinion. To obtain legal advice you should consult a lawyer specializing in real estate and property taxes.
Eyal GUR, Law Offices & Notary
1 AZRIELI Center
The Rond Tow- 34 th Floor
132 Derech Menahem Begin TEL-AVIV
Tel : 00972-3-6074666
Fax : 00972-3-6095500