Ever wonder why Israelis are so obsessed with real estate investing, seemingly far more than people in the U.S.?

Ever wonder why Israelis are so obsessed with real estate investing, seemingly far more than people in the U.S.?

There’s a simple reason: the tax system practically pushes them into it.

Once your salary crosses about ₪40K–₪50K per month, your combined income tax, Bituach Leumi, and mandatory pension/Keren Hishtalmut withholdings can reach 50–60%.

For every extra shekel earned, more than half disappears before it hits your account.

So what do smart, frustrated professionals do?

They look for income that isn’t punished like salary.

Enter Israeli residential real estate, one of the few legal ways to earn income taxed at just 10% flat, (rents under 5600 shekel per month are tax free!) with no Bituach Leumi and minimal paperwork.

That’s a huge difference compared with the 45–55% combined burden on salary income.

For many, buying property becomes a form of tax self defense.

Instead of handing half their earnings to the system, they park savings in an apartment that generates steady rent taxed at only 10%.

In the U.S., it’s very different.

High earners often receive employer-paid health insurance, enjoy 401(k) deductions, and have access to deeper capital markets.

In Israel, where those benefits are limited and the middle class is heavily taxed, real estate became part of the way to simply get by.

A nation where everyone from students to salaried engineers to retirees dreams of owning a rental unit. 

Not because it’s glamorous, but because it’s one of the few rational ways to keep more of what they earn and simply get by.