Buying an additional apartment as an investment is fundamentally different from buying a first apartment, both in financing and in taxation.
Financing: up to 50%
The Bank of Israel limits financing for an additional apartment to 50% of the property's value. That means you need at least half the price in equity. Financing limits
Purchase tax
On an additional apartment you pay 8% from the first shekel (up to NIS 6,055,070) and 10% above that, for purchases up to 10.2.2027, according to the Israel Tax Authority. On an apartment of NIS 1.8 million that is NIS 144,000. Purchase tax
Does it pay off?
To check an investment, calculate the net yield: - Expected annual rent - Minus: mortgage interest, maintenance, insurance, vacant periods, tax on rent (if it applies) - Divided by the equity you invested
Often, at today's apartment prices and interest rates, the current yield is low, and the investment relies mainly on expected appreciation.
Payment-to-income ratio
The bank may count part of the expected rent as income, but not always all of it. How the bank calculates your mortgage
More: buy now or wait?, capital gains tax.