Before you start

A determination of your Israeli tax residency
A Teudat Zehut if you have made aliyah, or passport and visa details
A tax file, opened by your employer for PAYE or by you if self-employed
For arnona: the tenancy in your name and, for the olim discount, your teudat oleh

Step-by-step

1
Settle your residency position before your first year-end
The test is centre of life — family, home, economic ties — backed by presumptions at 183 days in a year, or 30 days in a year totalling 425 over three. It can catch a remote worker under 183 days. The tax year is the calendar year.
OnlineWho: You, with an accountant if you have foreign income
2
Confirm whether the ten-year olim exemption applies
Olim and senior returning residents are exempt from Israeli tax on foreign-source income and foreign capital gains for ten years. It does not cover Israeli salary or Israeli freelance income. From 1 January 2026 new residents must disclose foreign assets and income even while exempt.
OnlineWho: You
3
If employed, file Form 101 and let PAYE run
Your employer withholds income tax, National Insurance and health tax monthly. Submit Form 101 at hire and each January so credit points apply. Most single-employer employees never file a return.
Via employerWho: Your employer
4
If self-employed, open income-tax, VAT and Bituach Leumi files
Choose osek patur below the small-dealer turnover threshold, which charges no VAT and files annually, or osek murshe, which charges VAT and files periodically. Standard VAT is 18% since 1 January 2025.
In personWho: YouRegister before your first invoice
5
Register for arnona with the Haifa Municipality in your own name
Arnona is billed to the occupier, not the owner. Register with your lease so the bill is issued to you — which also gives you the cleanest proof-of-address document in Israel and is a precondition for every discount.
OnlineWho: You
6
Claim the olim arnona discount inside the window
New immigrants can claim a substantial reduction on up to 100 square metres for twelve months chosen from their first twenty-four after aliyah, on production of a teudat oleh and a lease of at least twelve months. It is never applied automatically.
In personWho: You, at the municipality

Documents you’ll need

Teudat Zehut, or passport and residency proof
Form 101 for employees, or business registration for the self-employed
Teudat oleh for the ten-year exemption or the arnona discount
Tofes 106 annual employer wage and tax summary
Lease agreement for arnona registration

Things most newcomers don’t know

In a low-rent city, arnona is a much bigger slice of your housing cost than you expect.

Arnona is charged per square metre of floor area by municipal zone, and takes no account of what you pay in rent. In Tel Aviv it is a small addition to a very large rent. In Haifa, where a two-bedroom flat can rent for a third of the Tel Aviv price, the same arithmetic makes arnona a substantial line item — and a large cheap flat can carry a bill that reverses the apparent saving.

Source: Haifa Municipality arnona schedule; Israeli arnona methodology

The olim arnona discount is generous, time-limited and never automatic.

New immigrants can claim a large reduction on up to 100 sqm for twelve months chosen from the first twenty-four after aliyah. Nobody prompts you, the bill must be in your own name, and you need a lease of at least twelve months plus your teudat oleh. Because you choose which twelve months, spend them on your largest flat rather than your first.

Source: Israeli arnona discount regulations; Nefesh B'Nefesh

The ten-year exemption covers foreign capital gains as well as foreign income.

Selling overseas shares, property or a business inside the window can be free of Israeli tax where the gain is foreign-source. Most olim know the income side and underuse the gains side, and against a 25% capital gains charge the difference is large. Time any disposal with an accountant early rather than in year nine.

Source: Israel Tax Authority — olim and returning resident benefits

From 2026 the exemption survives but the reporting exemption does not.

The reporting exemption that used to run alongside the ten-year tax exemption was abolished for anyone becoming resident on or after 1 January 2026. Foreign income stays untaxed but must be disclosed. Guidance written before the change implies 'exempt' means 'not reported', which is no longer true and can produce penalties rather than tax.

Source: Amendment to the Income Tax Ordinance effective 1 January 2026

Common mistakes to avoid

Assuming the ten-year exemption shelters an Israeli salary or Israeli freelance income. It does not.
Treating the post-2026 disclosure duty as optional because no tax is due.
Comparing two Haifa flats on rent alone without adding arnona for the registered square metreage in each zone.
Leaving the arnona bill in the landlord's name, which forfeits the olim discount and your best proof of address.
US citizens forgetting that the Israeli exemption does not remove US filing, FBAR or FATCA obligations.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.