Betterment tax (mas shevach) applies to the gain created on selling a real-estate right — the difference between sale and purchase value, net of recognized expenses. For home sellers, the law provides significant exemptions — but eligibility depends on precise conditions.
The single-home exemption
The main exemption applies to a seller of a “single home” — someone owning only one residential apartment, held as such for at least 18 months. The exemption is capped at a value ceiling updated periodically; the excess is taxable.
What counts as a “single home”?
The law contains special provisions: a fractional additional apartment, an apartment inherited under certain conditions, or a replacement home bought before the old one sold — do not always negate the exemption. A professional review in advance prevents expensive surprises.
Deductions and recognized expenses
Even without a full exemption, the gain can be reduced by deducting expenses: legal and brokerage fees, documented renovations and improvements, purchase tax paid, financing costs and more. Keep receipts from every stage of ownership.
Plan ahead — not in hindsight
The tax is computed at sale, but the outcome is set by actions taken years earlier. Tax advice before signing — and sometimes before listing the property — allows correct timing, use of exemptions and significant savings.
Note: the above is a general overview only. Land-taxation law changes frequently, and every case turns on its facts.
This article is general information only and does not constitute legal advice. For any specific matter, please seek individual counsel.
