Israeli Rental Income Tax Calculator — Compare All 3 Tax Tracks

Israeli Rental Income Tax Calculator — Compare All 3 Tax Tracks

Israel gives landlords a unique choice: three different ways to pay tax on rental income. Choosing the wrong track can cost thousands of shekels per year. This calculator compares all three side by side.

Try the Rental Income Tax Calculator →

The 3 Israeli Rental Tax Tracks

Track 1: Exemption (Patur)

Rental income up to ₪5,654/month (2025 ceiling) is completely tax-free. Between ₪5,654 and ₪11,308, a partial exemption formula applies. Above ₪11,308, no exemption at all. This is the simplest option for landlords with modest rental income.

Track 2: 10% Flat Rate

Pay a flat 10% on gross rental income — no deductions allowed. Must be paid within 30 days of receiving rent. Under Section 122 of the Income Tax Ordinance, this track is popular with landlords who have no significant expenses.

Track 3: Marginal Rates

Rental income gets added to your other income and taxed at marginal rates (10%–50%). Expenses are deductible — maintenance, depreciation at 2%/year, agent fees, insurance. Best for landlords with high deductible expenses.

When to Choose Each Track

| Situation | Best Track | |-----------|-----------| | Rent under ₪5,654/mo, no other income | Track 1 (Exemption) | | Rent ₪6,000-₪15,000/mo, few expenses | Track 2 (10% flat) | | High expenses (mortgage interest, renovations) | Track 3 (Marginal) | | Multiple properties, high rental income | Track 3 (Marginal) |

The calculator shows the exact tax under each track and highlights which one saves you the most — no guesswork needed.

Important: Married Couples

Married couples can split rental income and each claim the Track 1 exemption ceiling independently. With two apartments renting at ₪5,000/month each, a couple could pay zero tax under Track 1.

Based on rates from the Israel Tax Authority (Mas Hachnasa) for 2025. Updated April 2026.

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Compare all 3 tax tracks →

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Originally published at https://tool.teamzlab.com?utm_source=blogger&utm_medium=article&utm_campaign=2026-05-il-rental-income-tax-calculator-3-tracks

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