In a sensational announcement for investment property sellers exempt from income tax on rental income, deductions for depreciation were applied during capital gains tax payment:

In a class action lawsuit filed against the Tax Authority by attorney Eli Meir from our firm, the Administrative Court accepted the class action and ruled that depreciation should not be deducted when calculating capital gains tax on the sale of residential properties rented out with exemption from income tax on rental income, as the Tax Authority has done until now. The court ordered the Tax Authority to reimburse the group members a total estimated amount of 118,000,000 shekels. This ruling represents a significant development for a large segment of property owners who, until now, were forced to pay unjust capital gains tax upon selling their properties, due to the Tax Authority deducting depreciation that was neither actually deducted nor could have been deducted in practice.

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