Renting out your Israeli apartment from abroad: taxes, yields and management
Updated November 2026 · agent+
Many of our foreign clients buy for a mix of personal use and rental. Letting from abroad is straightforward if three things are set up from the start: the tax track, a property manager, and a bank account that receives the rent. Here is the practical picture for 2026.
Three ways to be taxed on rent
Exemption: residential rent up to about ₪5,650 a month is exempt from income tax; above that the exemption shrinks and disappears at twice the ceiling. Most Tel Aviv apartments rent for more, so the exemption rarely covers everything.
10% flat track: 10% of the gross rent, no deductions, paid once a year by the end of January for the previous year. Simple and usually the best choice for a single apartment.
Marginal track: rent minus expenses, depreciation and mortgage interest, taxed at your marginal rate. Worth it only when expenses are high, for example in the first years of a large mortgage.
Non-residents use the same tracks. Your home country may also tax the rent, usually with a credit for the Israeli tax under the double-tax treaty; US citizens report worldwide income regardless.
What the market pays
Gross yields in central Tel Aviv run around 2.5% to 3.5% a year; Ramat Gan and Givatayim a little higher. Small apartments near the sea, the university or the Diamond Exchange rent fastest. Furnished, renovated apartments in older buildings often give the best yield per shekel invested.
Leases and tenants
The standard residential lease is one year with an option to extend, unfurnished, with a bank guarantee or a promissory note from the tenant and a guarantor. Rent is paid monthly by standing order into your Israeli account. The Fair Rental Law sets minimum conditions and limits the deposits a landlord can require.
Managing from abroad
A property manager finds tenants, holds the keys, handles repairs and the building committee, and sends you a monthly statement. Fees are typically one month’s rent per new tenant plus 5–8% of the rent. For a single apartment, many owners use the agent who sold them the apartment; we offer this for homes bought through us.
When you sell
Capital gains tax (mas shevach) is 25% of the real gain for a foreign resident. The exemption for a sole residential apartment is available to foreign residents only if they prove they own no home in their country of residence. Betterment levy may apply if the building gained extra rights while you owned it. Plan the sale with the same lawyer who did the purchase.
Frequently asked questions
›Do I need an Israeli tax file to rent out?
On the 10% track you file a short annual report; on the marginal track you open a tax file and file a full return. Your accountant or lawyer handles both.
›Can I rent on Airbnb?
Short-term rental in Tel Aviv faces municipal restrictions and higher municipal tax, and the income is taxed as business income. For most foreign owners a long-term lease is simpler and safer.
›What if I use the apartment part of the year?
You can let it for a fixed term and keep it free for your visits; rents for short fixed terms are higher but tenants are harder to find. Many owners keep it for themselves in summer and holidays and let the rest of the year.
General information, current as of the date shown; not legal or tax advice. Brackets and rates change: check your own situation with an Israeli lawyer or tax adviser before you sign.