Relocatees’ questions and the tax advisor’s answers

Questions and answers – real estate tax and residency

Question: I work in high-tech and am relocating to Toronto, Canada with my family for a period of 3 years. We own a property in Israel and pay a monthly mortgage. Since we plan on visiting during the holidays, we would like to keep out property as is for the first phase of our relocation and then check the possibilities we have- keeping the house and renting it for a long period or selling it and buying a house in Toronto. We would like to know what will be the tax implications.

Tax advisors answer: It is recommended that you rent your property before relocating since disconnection of residency might take a while. When considering selling and buying it is important to know that the property in Israel must be sold before buying one in Canada, otherwise you lose the tax exemption in Israel. You should also know that when buying a house as Canadian residents, Canadian tax applies.

Question: We relocated to Ireland in 2020 through a business company for a period of 3 years. We have sold our house upon departure, and during the year 2021 detached our residency. Since my employer has decided to extend my employment contract for another year, I would like to know if we should purchase a property in Israel while we are still in Ireland or while Israel.

Tax advisors answer: It is better to make the purchase while in Israel in order to show that you have not disconnected residency.

Question: We are a retired couple with dual citizenship: Argentinian and Israeli. We own a property in Israel and have recently been thinking that due to the high cost of living and decrease in the standard of living, it would be right for us to sell our house in Israel and return to Buenos Aires. We are debating whether it is right for us to initially rent the property and a later stage sell it and buy a property in Argentina and also wanted to understand what the tax implications of this step would be.

Tax advisors answer: It is better to sell the property as residents of Israel in order to easily receive the exemption from the sale.

Question: We were sent to Washington on behalf of a governmental office for two years. We have rented our property in Israel and when we return, a year from now, we would like to sell it and buy a different one. Since we have kept our Israeli residency, will there be any tax implications?

Tax advisors answer: Since you have kept your Israel residency you may sell your property and buy a new one with Purchase tax exemption.


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