Israel's Real Estate Market Faces Sharp Revenue Decline Amid Prolonged Freeze

Israel's real estate market is experiencing a prolonged freeze that has led to a significant drop in government revenues from capital gains tax and purchase tax. This decline is occurring as the high purchase tax imposed on investors is set to expire in about six months. The future of this critical tax policy may be decided by the next government, raising uncertainty about the market's direction. Yaniv Cohen, Senior Deputy Director for Real Estate Taxation at the Israel Tax Authority, discussed these issues in a special interview on Channel 12's program "The 12th Floor," aired on June 30, 2026. The ongoing stagnation in the real estate sector poses challenges for state income and policy decisions moving forward.