Prenup & Second Apartment - How to Save Hundreds of Thousands in Tax
This article is for general informational purposes only and does not constitute legal advice. For advice tailored to your circumstances, consult a licensed attorney.
Key Takeaways
- Without a prenup, a second apartment is taxed at 8% from the first shekel — on ₪2.5M that is ₪200,000 in tax
- With a property-separation prenup: full exemption up to ~₪1.98M, then 3.5% — total ~₪18,000 instead of ₪200,000
- Three conditions: a genuine agreement (not just on paper), actual separation (separate accounts), and signing before the purchase
- This works even if already married — a post-marriage agreement requires court approval but is fully valid
The Problem: 8% Purchase Tax From the First Shekel
When you buy property in Israel and your family already owns one, the Tax Authority treats the new property as an "additional apartment." The result? Purchase tax of 8% from the first shekel (and 10% above 6 million). On an apartment worth NIS 2.5 million, that's NIS 200,000 in tax.
With a prenup defining property separation, the existing apartment "belongs" only to the partner who purchased it. The other partner buys the new apartment as a "sole property." The result? 0% tax on the first NIS 1,978,745, and 3.5% on the rest. Total: about NIS 18,000 instead of 200,000.
Savings: NIS 182,000. An agreement that paid for itself 300 times over.
Three Conditions the Tax Authority Requires
Signing an agreement isn't enough. The Tax Authority checks three things:
1. The Agreement Is Genuine
Not a paper-only agreement signed solely for tax savings. The agreement must reflect a real situation - property separation you actually practice.
2. Separation in Practice
If you signed a property separation agreement but share a bank account, have a joint mortgage on both apartments, and manage finances as one unit - the Tax Authority may reject the application.
3. Timing
Draft the agreement before purchasing the property. An agreement signed after the purchase raises suspicion and may not be accepted.
Numerical Examples
Apartment Worth NIS 2,000,000
| Without Prenup | With Prenup | |
|---|---|---|
| Property type | Additional | Sole |
| Purchase tax | NIS 160,000 | NIS 744 |
| Savings | NIS 159,256 |
Apartment Worth NIS 3,500,000
| Without Prenup | With Prenup | |
|---|---|---|
| Property type | Additional | Sole |
| Purchase tax | NIS 280,000 | NIS 70,356 |
| Savings | NIS 209,644 |
Questions Couples Ask
"What if we're already married?" - You can. A prenup after marriage requires court approval, but it's fully valid.
Want to find out how much you'll save?
Filling out the questionnaire is completely free. Full digital process in 15 minutes.
- 💰Save 90% — ₪590 vs ₪5,000–15,000
- ⚡Done in 30 minutes online
- ⚖️Lawyer-reviewed — same legal validity
"Does the separation affect other assets?" - That's up to you. You decide what's separate and what's shared. You can separate only real estate and share everything else.
"How much does the agreement cost?" - NIS 990 at Noberu. Compared to savings of NIS 150,000+ - it's the best investment you'll make.
The Bottom Line
If you're buying a second apartment and haven't looked into a prenup - you're probably paying too much tax. This isn't a loophole or a trick. It's the law. Use it.
Want to check how much you'd save? Try our purchase tax calculator →
Noberu
Content Team
צוות התוכן של Noberu מורכב ממומחי משפט ישראלי, דיני משפחה ומיסוי מקרקעין. אנחנו כותבים תוכן מקצועי ונגיש כדי לעזור לזוגות להבין את זכויותיהם.