April 5, 2026 marks a major turning point for all those considering making Aliyah or returning to Israel after a long absence. An exceptional transitional provision has come into effect, granting new immigrants a progressive five-year tax exemption — this time extended to income generated in Israel.
The situation before the reform
Until 2026, a new immigrant or an Israeli returning to the country after more than ten years of absence benefited from a ten-year tax exemption on all their foreign income. However, this benefit did not cover remote work performed from Israel for a foreign company. Furthermore, eligible immigrants enjoyed an exemption from declaring their foreign assets and income for ten years. This declaration exemption ends for all immigrants arriving in Israel from 2026 onwards.
What the reform changes
The new provision grants, retroactively from November 5, 2025, an exemption on all income of new immigrants — including income generated in Israel, such as salaries or profits from a local business. The exemption is progressive and capped annually as follows:
2026 : 600,000 shekels
2027 and 2028 : 1,000,000 shekels
2029 : 350,000 shekels
2030 : 150,000 shekels
Specific measures are provided for companies as well as for people employed by a close relative.
Remote work finally recognized
This is one of the major advances of this reform. From now on, a new immigrant who works physically from Israel for a foreign company fully benefits from the exemption. As long as their income is fiscally attributable to Israeli territory, it falls within the scope of the law.
Who is affected?
The reform applies to all new immigrants and returning citizens becoming tax residents in Israel between November 5, 2025 and December 31, 2026. Warning: benefits are retroactively canceled for anyone leaving the country between 2028 and 2029.
Impact on the real estate market
By encouraging Aliyah and the return of Israelis from abroad, this reform should stimulate real estate demand, particularly in large cities and areas favored by French speakers. For future buyers wishing to take advantage of this tax window, it is advisable to contact a tax lawyer before making any decision.
This article is provided for informational purposes. For any personal situation, consult a licensed tax advisor in Israel.
