{"id":8745,"date":"2026-01-05T13:58:07","date_gmt":"2026-01-05T10:58:07","guid":{"rendered":"https:\/\/rs-nadlan.com\/?p=8745"},"modified":"2026-09-30T04:11:47","modified_gmt":"2026-09-30T01:11:47","slug":"new-or-secondhand-apartment-18-percent-vat","status":"publish","type":"post","link":"https:\/\/rs-nadlan.com\/en\/new-or-secondhand-apartment-18-percent-vat\/","title":{"rendered":"New or Secondhand Apartment? What the 18% VAT Everyone Forgets Really Means"},"content":{"rendered":"\t\t
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Your “Silent Partner” in the Apartment: How Does VAT (18%) Affect Your Wallet?<\/h3>

When we talk about the cost of living or housing prices, we tend to look at the price of the apartment itself. But in today’s Israeli real estate market, there’s a “silent partner” that takes a huge share of every new apartment deal: value added tax (VAT), which currently stands at 18%.<\/p>

At RS Nadlan, we meet quite a few buyers who are torn between “brand new, still in the wrapping” and a secondhand apartment. The common mistake? Comparing list prices and forgetting that one side of the equation hides an extra charge of almost a fifth of the price.<\/p>

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The Big Difference: Where Do You Pay and Where Don’t You?<\/h3>

This is the most important rule to know:<\/p>

New apartment from a developer: Subject to full VAT (18%). The price you see on billboards (“starting from \u20aa2.5 million”) already includes VAT, but it makes the product significantly more expensive.
Secondhand apartment: Exempt from VAT. When a private individual sells to a private individual, there is no VAT on the deal.<\/p>

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Let’s Do the Math (It Hurts, but It Matters)<\/h3>

Suppose you have a budget of \u20aa2,500,000.<\/p>

If you buy an apartment from a developer at this price: In practice, the net value of the apartment is only about \u20aa2,118,000. The rest of the money (about \u20aa381,000!) goes straight to the state as VAT. In other words, you got a “product” that is worth less, because you paid a high tax on it.
If you buy a secondhand apartment at this price: The entire \u20aa2.5 million goes toward the value of the apartment itself (location, size, renovation). You’re buying “more apartment” for the same money.<\/p>

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So Why Is Everyone Rushing to New Apartments?<\/h3>

There are good reasons for it: a safe room (Mamad) for security, underground parking, no wear and tear, and convenient payment terms (such as 20\/80). However, in light of the high VAT (18%), the gap in price per sqm between a new apartment and a secondhand apartment in the same area keeps widening.<\/p>

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The Opportunity in the Secondhand Market<\/h3>

Precisely today, in an 18% VAT environment, secondhand apartments are becoming more attractive than ever (“Value for Money”).<\/p>

Immediate savings: You don’t pay the VAT “newness penalty.”
Renovation instead of tax: Instead of paying \u20aa380,000 to the state as VAT on a new apartment, you can take a secondhand apartment and invest that amount in a dream renovation. The result? An apartment that’s as good as new, built to your standard, and often in a better location and a well established neighborhood.<\/p>

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Questions and Answers (FAQ)<\/h3>

Is VAT expected to go down soon?
<\/strong> It doesn’t look that way. In light of the state budget deficit and defense spending, the high tax environment (18%) is expected to stay with us for the coming years. It’s not wise to build a business plan on a VAT cut.<\/p>

Question: Is there a way to get a VAT refund on an apartment? Answer:<\/strong> For a private individual buying an apartment to live in, no. VAT is a final consumption tax. Only companies and registered businesses that purchase commercial property for business activity can offset the VAT.<\/p>

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Don’t Let the Tax Call the Shots<\/h3>

Whether you’ve decided to go for the luxury and security of a new apartment, or you’ve spotted the financial potential of a secondhand apartment, we’re here to help you find the best deal. At RS Nadlan, a real estate agency in Ramat Aviv HaYeruka<\/a>, we’ll present you with the full picture, including all the associated costs, so there are no surprises.<\/p>

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[Errors and omissions excepted. The information in this article does not constitute tax or legal advice. Every transaction requires an individual review. Errors and omissions excepted.]<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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