Israel is considering a 2026 tax policy that would exempt new immigrants and returning residents from taxation for their first two years of residency, a Thursday press release from the Finance Ministry announced.
After the first two years of residency, new immigrants and returning residents' tax rates will increase by 10% each year, reaching up to 30% by 2030. The reform applies to annual incomes up to ₪1 million.
Existing benefits for new immigrants and returning residents, such as a 10-year exemption on foreign income and tax credit points, will remain in place.
Finance Minister Bezalel Smotrich and Aliyah and Immigration Minister Ofir Sofer announced the reform as part of the state budget presented this week.
Calling upon Jews and Israelis abroad to 'come home'
“Zionism has always been built on three pillars: settlement, security, and aliyah. Over the past two years, we have invested heavily in security, and thank God, Israel is in a different place today. The year 2026 will bring a revolution in Aliyah - not as a slogan, but as a practical plan of action," Smotrich said.
"I call upon Jews in the Diaspora and Israelis abroad: come home."
Sofer said that the measure was a "major and meaningful component to our national effort to encourage Aliyah."
“Over the past three years, we have strengthened and rebuilt Israel’s Aliyah and integration infrastructure. This is a data-driven and comprehensive initiative, designed to ensure optimal absorption for new olim, create real opportunities for their integration into Israeli society, and contribute to economic growth," he said.
"Aliyah holds profound Zionist, social, and economic significance for the State of Israel. It strengthens our social fabric, brings high-quality human capital, and boosts growth, innovation, and national development.”