If you own an apartment which is rented out to an individual or individuals for 100% residential purposes please note that for 2006 the sum exempt from tax (gross) is nis 3,830 per month. This sum relates to the combined income of the family.

There is a complicated marginal allowance for people who receive slightly more than this.

If the apartment or apartments are residential and situated in Israel but the exemption is not available the tax rate is 10% of the gross income without limit on condition that the income tax is paid within 30 days each time you receive rent (if you receive rent more than once in a month, pay the tax within 30 days of the first sum received in the month).

The tax may be paid by internet; otherwise it is necessary to go to the tax office to obtain payment slips. There is no necessity to open a tax file or file an annual tax report if without the apartment(s) you would have been exempt from this unless the income is a very considerable sum.

If you do have to submit annual tax reports, even where the income is exempt it must be included in the report.