Anyone who transferred NIS 500,000 or more abroad within 12 months must file an annual return, for the transfer year and the following year.
Family foreign assets worth NIS 2,086,000 or more on any day of the year cancel the exemption from filing a return (2023-2026).
Rent from Romania goes in appendix D to the annual return, form 1324, which is also where you claim the credit for the Romanian tax.
A sale of foreign property is reported within 30 days on form 1399, with an advance. Tax up to 25% on the real gain, less the Romanian tax.
The single return (Declarația unică) on rent is filed and paid in Romania by 25 May. The confirmation is needed for the credit in Israel.
Reporting a property in Romania: the short answer
An Israeli resident who buys property in Romania will almost always have to file an annual return (form 1301). Three mechanisms in the law trigger the obligation: transferring NIS 500,000 or more abroad within 12 months, foreign assets worth NIS 2,086,000 or more on any day of the year, and foreign income such as rent. Foreign income is detailed on form 1324, and a sale is reported within 30 days. There is no special form "for buying a property"; there is an annual return.
Most people I meet are sure that if they have not earned a shekel from the property, they have nothing to report. It is a common mistake, which is why I wrote this map: what triggers the obligation, on which form, and when.
The difference between "paying tax" and "filing a return"
These are two separate obligations. You can be required to file an annual return without paying a single extra shekel of tax, for example in the year you transferred money to buy the villa and had no income from it yet.
Section 131 of the Income Tax Ordinance (in Hebrew) sets out who must file a return. The regulations on exemption from filing a return (in Hebrew) set out who is exempt, and when the exemption is lost. That is where the thresholds that matter to anyone buying property abroad are found.
The duty to report does not depend on profit. It arises from the money transfer, the value of your assets and your income.
The first trigger: transferring NIS 500,000 abroad
Section 131(a)(5f) (in Hebrew) requires an individual Israeli resident who transferred NIS 500,000 or more out of Israel within 12 months to file a return. The return is filed for the year in which the amount was first transferred, and for the following year too.
A property of about €300,000 is well above this threshold, even if you pay for it in several transfers. When buying off-plan and paying the developer in stages, all the transfers within 12 months are added together. How to move the money itself, and what the banks ask for, is covered in our article on transferring money to Romania.
The second trigger: foreign assets above NIS 2,086,000
Under regulation 3(a)(6) of the exemption regulations, the exemption from filing does not apply to anyone who, together with their spouse or children under 18, held foreign assets worth NIS 2,086,000 or more on any day of the tax year. That is the amount for 2023 to 2026. Regulation 3(a)(7) sets an identical threshold for balances in foreign bank accounts.
Note two details. The count is per family, not per spouse separately. And the test is "on any day", not at year end. A villa, a Romanian bank account and an investment portfolio abroad are added together.
The third trigger: income from the property
The filing exemption for "foreign income" applies only when it is up to NIS 375,000 a year (for 2023 to 2026) and an advance tax payment was made on it in Israel. Someone who rents out a villa in Romania and pays tax only in Romania does not meet the second condition, and so in practice files a return.
The duty to report does not depend on profit. It arises from the money transfer, the value of your assets and your income.
For rent there are two tracks in Israel. Section 122A (in Hebrew) allows a 15% tax on the rent, less depreciation only and with no credit for the Romanian tax. The alternative is the marginal rate, with expenses deducted and a credit under the treaty. The full comparison is in our guide to the Israel–Romania tax treaty, and the Romanian side in our article on rental income tax in Romania.
The reporting map: event, form and deadline
| Event | What you file in Israel | When |
|---|---|---|
| Transferring NIS 500,000 or more abroad within 12 months | Annual return, form 1301 | For the transfer year and the following year |
| Foreign assets (family) above NIS 2,086,000 on any day | Annual return, form 1301 | Every year you exceed the threshold |
| Rent from the property in Romania | Form 1301 plus appendix D, form 1324 | In the annual return |
| Claiming depreciation on the property | Forms 1342 and 1343 | Attached to the annual return |
| Selling the property | Notice of sale and tax calculation, form 1399 | Within 30 days of the sale |
| Claiming not to be an Israeli resident | Residency declaration, form 1348 | Attached to the annual return |
All these forms are published by the Israel Tax Authority on its annual return page (in Hebrew). Form 1324 is titled there "Income from abroad and tax paid on it", and it is where you claim the credit for the Romanian tax.
Selling: 30 days, not year end
The sale of a foreign property by an Israeli resident is a capital gains event under the Income Tax Ordinance, not under the Real Estate Taxation Law. Section 91(d)(1) (in Hebrew) requires a report within 30 days of the sale, and an advance payment equal to the tax.
The tax rate on an individual's real capital gain is up to 25%. Someone whose taxable income exceeds NIS 721,560 (for 2024 to 2027) may also pay surtax: 3%, plus another 2% on income from capital sources. The tax paid in Romania, 3% or 1% of the transaction value, is deducted from the Israeli tax, up to the amount of the Israeli tax. The Romanian side is detailed in our article on tax when selling property in Romania.
And what about Romania?
Romania has its own reporting system. An individual who lets property files the "single return" (Declarația unică), and according to PwC the general deadline for filing and payment is 25 May. The confirmation of tax paid in Romania is the document without which you will not get a credit in Israel. Keep it with your annual return.
Mistakes I see again and again
- "I made no profit, so there is no return." The transfer alone, above NIS 500,000, requires a return for two years.
- "The property is in my wife's name." The NIS 2,086,000 threshold is tested at family level.
- "I paid in Romania, that is enough." You report in Israel in any case. The treaty prevents double taxation, not double reporting.
- "I will report the sale at year end." The law requires 30 days.
Frequently asked questions
Do I have to report the purchase of a property in Romania to the Israel Tax Authority?
There is no dedicated form for the purchase, but in most cases the purchase triggers an annual return obligation: transferring NIS 500,000 or more abroad within 12 months requires a return for the transfer year and the following year, and family foreign assets above NIS 2,086,000 cancel the filing exemption.
Which form do I use to report rent from a property in Romania?
The annual return, form 1301, and its appendix D, form 1324, "Income from abroad and tax paid on it". On form 1324 you also detail the tax paid in Romania to get a credit, on the marginal-rate track.
When do I report the sale of a property in Romania?
Within 30 days of the sale, in the notice of sale and tax calculation (form 1399), and you pay an advance. At year end the sale is also included in the annual return.
Do my spouse's assets count towards the NIS 2,086,000 threshold?
Yes. The regulations look at the foreign assets of you, your spouse and children under 18, on any day of the tax year.
What happens if I did not file a return?
Failing to file on time can lead to fines and a best-judgement assessment. If you have missed a year, it is worth going to an accountant and correcting it on your own initiative, before the authority contacts you.
The bottom line
Anyone buying property in Romania should assume they are entering the Israeli annual return system, for at least two years. It is not complicated, but it requires order: keep transfer confirmations, contracts and Romanian tax payment confirmations, and coordinate the payment schedule with your accountant.
If you are at the planning stage, in Balotești or anywhere else in Romania, book a 30-minute call with me. Together we will build the payment timeline and mark where each report falls, so you arrive at your accountant with an organised file.
Moti Azulay, Compass Group Romania
Sources and data: Income Tax Ordinance, sections 91, 121B, 122A and 131, updated version (in Hebrew) · Income Tax Regulations (Exemption from Filing a Return), 1988, regulation 3 (in Hebrew) · Israel Tax Authority: annual return for individuals and related forms (in Hebrew) · Israel Tax Authority · PwC Tax Summaries, Romania: Tax administration · Romanian tax authority (ANAF).
This article is for general information only and is not legal, tax or financial advice. The thresholds are correct for the tax years stated, according to the updated text of the legislation, and may be revised. Filing deadlines are set each year and are sometimes postponed. Before filing, consult an accountant or tax adviser.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
