A returning resident is not a new immigrant — and in two places that costs money.
Two statuses, two statutes, and neither follows from the other. For purchase tax, Regulation 12 is reserved for someone entering as an oleh — and a returning resident does not fall within it. For income tax the picture reverses, and section 14 places a veteran returning resident right alongside a first-time Israeli resident. This page separates the two.
"Returning resident" and "veteran returning resident" are not the same thing
A veteran returning resident is someone who was a foreign resident for at least ten consecutive years before becoming an Israeli resident again. Section 14 of the Income Tax Ordinance places them alongside a first-time Israeli resident and exempts both, for ten years, from tax on income produced or accrued outside Israel or derived from assets outside Israel. A returning resident who is not "veteran" — someone who was away for less than that — sits in an entirely different regime, with far narrower relief. The gap between the two statuses is measured in a few years abroad, sometimes months. Which is why the first question in any such case is not "what am I entitled to" but "exactly when did I stop being an Israeli resident, and on what basis."
"Israeli resident" is decided by center of life, not by a passport
The definition of "Israeli resident" in section 1 of the Income Tax Ordinance rests on center of life — where the home, the family, the occupation and the interests are. It is a substantive test, which is why two families who left in the same week can end up in two different statuses. What follows practically: people who left without tying up loose ends — active accounts, health insurance, a rented-out apartment, a status never regularized — sometimes discover on return that the ten-year clock did not start when they assumed. Which is exactly why the check is done before buying rather than after: a purchase creates a clear reference point with the authorities, and it is better to have your affairs in order by then.
And what a returning resident does not get: Regulation 12
Regulation 12 of the Purchase Tax Regulations applies to someone entering Israel as an oleh or on an A/1 temporary-residence permit. A returning resident, however veteran, does not fall within that definition — so their purchase tax is computed on the ordinary brackets, according to how many apartments they own. And this is where the old apartment comes in. A returning resident who left an apartment in Israel behind, and still holds it, is not buying a "single home" now — with everything that follows for purchase tax and for the LTV under Directive 329. What to do with the old apartment, and in what order relative to the new purchase, is not an emotional question. It is the most expensive question in the file.
What people ask before they move back
01I was abroad for nine years. Is that enough?
Not for "veteran returning resident" — that requires at least ten consecutive years as a foreign resident. But the precise question is when you stopped being an Israeli resident under the center-of-life test in section 1 of the Ordinance, and that is not necessarily the day you boarded the plane.
02I have an apartment in Israel from before I left. How does that affect things?
In two places: for purchase tax, the new apartment is not a "single home" for you; and for financing, Directive 329 caps an investment apartment at 50% of value. The order in which you sell the old one and buy the new one changes both outcomes.
03Can I test the move before fixing my status?
There is an adjustment-year mechanism — a year in which you continue to be treated as a foreign resident for tax purposes. It is counted inside the ten exempt years rather than added to them, and the request is filed on the form and within the period set in the Regulations. The deadline is short; verify it with the Ministry of Aliyah and Integration before relying on it.
Sources: sections 1 and 14 of the Income Tax Ordinance [New Version] and Regulation 12 of the Purchase Tax Regulations; updated July 2026. Residency is not decided by your passport but by the center-of-life test in section 1 of the Ordinance, and it is examined person by person, tax year by tax year. General information only, not tax advice.
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