Canada
Israeli Property Valuation for Canadian Tax Residents
Last Update - October 2026
Independent Real Estate Appraisal in Israel for Canadian Tax Residents, Property Owners and Their Professional Advisers
Do you own real estate in Israel and are you a Canadian tax resident?
IL APPRAISER provides independent Israeli real estate valuations for property owners in Canada and for Canadian accountants, CPAs, tax advisers, lawyers and other professionals who need reliable information about Israeli real estate.
A valuation may be relevant to Canadian tax reporting, foreign rental income, capital gains, inheritance, estate matters or other professional matters.
It may also be useful for completely non-tax matters — such as deciding whether to buy a property, determining realistic rental income, evaluating an urban-renewal proposal or reviewing an Israeli Betterment Levy assessment.
Our role is to establish the value and relevant real-estate characteristics of the Israeli property.
When Might an Israeli Property Valuation Be Relevant?
You may be particularly interested in our service if:
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You are a Canadian tax resident and own real estate in Israel.
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Your accountant or CPA needs an independent property value.
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You receive rental income from an Israeli property.
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You are selling or considering selling an Israeli property.
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You need a valuation for a specific historical date.
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You inherited an Israeli property or need to divide an estate.
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You are considering transferring an Israeli property as a gift.
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You are moving to Canada and already own property in Israel.
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You are leaving Canada while still owning an Israeli property.
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You are involved in a divorce or financial settlement.
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You are considering buying an Israeli property or investing in Israeli real estate.
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You have received an urban-renewal proposal and want to assess the economic terms.
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You received a Betterment Levy assessment in Israel and want to examine the valuation.
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You already have a previous appraisal and need an updated value.
Canadian Tax Matters Relevant to Israeli Property
Israeli rental income can be taxable in Canada for a Canadian tax resident.
Rental income from real property is generally reported as income from property, and CRA provides Form T776 — Statement of Real Estate Rentals to calculate rental income and expenses.
The Canadian tax calculation may involve:
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Gross rental income
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Advertising and management expenses
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Insurance
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Property taxes
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Interest
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Repairs and maintenance
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Capital cost allowance (CCA), where applicable
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Foreign taxes paid
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Currency conversion
The tax treatment is determined by the client's Canadian tax adviser.
But What Is the Property Actually Worth to Rent?
This is a separate real-estate question.
IL APPRAISER can provide an independent market rental-value assessment based on Israeli rental evidence and the property's characteristics.
Example
A Canadian resident owns an apartment in Tel Aviv and is about to renew the lease.
The owner wants to know whether the proposed rent is consistent with the current Israeli market.
IL APPRAISER can assess the property's market rental value using comparable Israeli rental properties, location, size, condition and other relevant characteristics.
This service can be useful even when there is no tax-reporting issue.
Form T1135 — Foreign Income Verification Statement
An Important Canadian Reporting Requirement
A Canadian resident who holds specified foreign property with a total cost amount exceeding CAD $100,000 at any time during the year may have to file Form T1135 — Foreign Income Verification Statement.
A crucial point:
The $100,000 threshold is based on cost amount, not fair market value.
For many properties, cost amount is generally based on the property's adjusted cost base rather than its current market value.
This distinction can be very important for owners of Israeli real estate.
Does an Israeli Property Have to Be Reported on T1135?
Not every foreign property is treated the same way.
CRA specifically states that:
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Foreign personal-use property is excluded from T1135.
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Foreign real property used primarily for personal enjoyment can therefore be excluded.
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Property used exclusively in an active business may also be excluded.
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Foreign real property held for income-producing purposes can be specified foreign property.
CRA gives the example of a foreign condominium that is rented for most of the year with a reasonable expectation of profit: such a property can be specified foreign property and must be reported if the threshold is exceeded.
A property that is primarily personal-use may be treated differently.
The determination is factual.
T1135 — $100,000 Does Not Mean No Tax
There is an important distinction between:
Income tax
and
Foreign-property reporting
Even where the cost amount of foreign property is below CAD $100,000 and Form T1135 is therefore not required, Canadian residents must still report taxable income earned from foreign property.
In other words:
No T1135 ≠ No Canadian tax
Rental income from an Israeli property must still be considered in the Canadian tax return where applicable.
T1135 — What Happens If the Property Was Inherited or Gifted?
CRA states that the cost amount of foreign property acquired by gift, bequest or inheritance is its fair market value at the time the property was received.
This creates a direct connection between an independent Israeli valuation and future T1135 reporting.
Example
A Canadian tax resident inherits an apartment in Jerusalem.
The apartment has a fair market value of CAD $650,000 when the inheritance is received.
That value can become relevant in determining the cost amount for future T1135 reporting.
The Canadian tax adviser determines the reporting treatment.
T1135 for New Canadian Residents
This is particularly relevant to people moving from Israel to Canada.
An individual generally does not have to file Form T1135 for the tax year in which they first become a Canadian resident.
For future years, the cost amount of foreign property owned when the individual became resident is generally based on its fair market value at the time Canadian residency began.
That means the market value of an Israeli property at the date of immigration to Canada can become an important historical valuation point.
Example
An Israeli resident moves to Canada in 2026 while owning an apartment in Netanya.
At the date Canadian residency begins, the apartment has an Israeli market value equivalent to CAD $800,000.
That value may be relevant to establishing the cost amount for future Canadian foreign-property reporting.
An independent Israeli appraisal can provide professional evidence of the property's market value at the immigration date.
The client's Canadian tax adviser determines the tax and reporting consequences.
Capital Gains — Selling an Israeli Property
Capital Gains (Gains en capital)
Canada does not impose a separate federal tax called "Capital Gains Tax."
Instead, a capital gain is generally included in income according to the applicable capital gains inclusion rate.
When a Canadian resident sells Israeli real estate, the resulting gain may therefore be relevant to Canadian income tax.
The calculation can involve:
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Original cost
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Adjusted cost base (ACB)
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Capital improvements
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Legal and transaction costs
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Proceeds of disposition
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Foreign tax paid
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Foreign-currency conversion
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Relevant valuation dates
The Canadian tax adviser determines the taxable capital gain.
IL APPRAISER provides the Israeli property valuation where market value at a particular date is required or useful.
2026 Capital Gains Update
The proposed Canadian increase in the capital-gains inclusion rate from 50% to 66⅔% was not proceeded with.
For the current enacted rules, the capital-gains inclusion rate remains 50%
.
This means that, in general terms, one-half of a capital gain is included in income for Canadian tax purposes, subject to the detailed rules and any applicable special treatment.
Canadian capital gains rules can change, so the current rules should always be checked for the specific tax year.
Principal Residence & Israeli Property
A Canadian resident may have more than one property, but the principal residence exemption has specific conditions.
A property outside Canada can potentially be relevant to Canadian principal-residence rules if it meets the statutory requirements, including the requirements concerning ordinary habitation and Canadian residency.
However, the exemption does not automatically apply simply because the property is a home owned by the taxpayer.
Example
A Canadian resident owns an apartment in Israel that was used by the family during certain years.
The Canadian adviser needs to determine whether those years can be treated as principal-residence years and how the property should be reported when sold.
CRA requires the disposition of a qualifying principal residence to be reported, and Form T2091(IND) may be required.
The client's tax adviser determines whether the exemption is available.
Inheritance & Deemed Disposition at Death
One of the most important Canadian rules for property owners concerns death.
When an individual dies, they are generally considered to have disposed of their capital property immediately before death for proceeds equal to its fair market value at the date of death, unless a rollover or another exception applies.
This is known as a deemed disposition.
For Canadian purposes, the resulting capital gain is calculated using the deemed proceeds and the adjusted cost base.
This can make the value of Israeli real estate at the date of death particularly important.
Example
A Canadian resident owns an apartment in Herzliya and dies while still owning it.
There is no actual sale of the apartment on the date of death.
Nevertheless, Canadian tax rules may treat the property as having been disposed of immediately before death at its fair market value.
An independent Israeli appraisal can provide evidence of the property's market value at the relevant date.
The executor and tax adviser determine the applicable treatment and any available rollover.
Foreign Property in an Estate
An estate containing Israeli real estate may require information about:
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Fair market value at death
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Ownership
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Adjusted cost base
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Existing debt
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Property rights
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Rental arrangements
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Planning status
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Foreign taxes
The deceased's final T1 Income Tax and Benefit Return can include capital gains arising from the deemed disposition.
Where the property is later sold by the estate or beneficiary, a separate tax calculation may apply.
Gifts of Israeli Property
Canadian tax rules can also treat a gift of capital property as a disposition at fair market value.
CRA states that when a taxpayer gives capital property as a gift, the taxpayer is generally considered to have sold it at its fair market value at the time of the gift.
This can create a capital gain even though no sale price was received.
Example
A Canadian resident transfers an apartment in Israel to a family member without receiving payment.
The Canadian tax adviser needs to determine the property's fair market value at the date of the gift.
IL APPRAISER can provide an independent Israeli valuation as of that date.
The Canadian adviser determines the tax consequences of the transfer.
Foreign Tax Credit
Form T2209 — Federal Foreign Tax Credits
A Canadian resident who pays qualifying foreign income or profit taxes on income earned outside Canada may be able to claim a foreign tax credit.
For federal purposes, Form T2209 — Federal Foreign Tax Credits is used to calculate the federal credit.
Where Israeli tax has been paid in connection with rental income or a property disposition, the Canadian adviser may need to examine whether a foreign tax credit is available.
The amount and availability of the credit depend on the taxpayer's circumstances and the applicable Canadian rules and treaty.
IL APPRAISER does not calculate the foreign tax credit.
Our role is to provide the Israeli property valuation where required for the underlying matter.
Leaving Canada — Departure Tax
Canada also has a significant rule when an individual ceases to be resident in Canada.
A departing individual is generally deemed to have disposed of certain property at fair market value when leaving Canada and to have immediately reacquired it at the same value.
This is commonly known as the departure tax.
Canadian real property and certain other categories are excluded, but Israeli real estate can generally fall within the property affected by the deemed-disposition rules.
The departure may therefore create a need to establish the fair market value of an Israeli property on the date Canadian residency ends.
Forms That May Be Relevant
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T1243 — Deemed Disposition of Property by an Emigrant of Canada
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T1161 — List of Properties by an Emigrant of Canada
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T1161 may be required where the total fair market value of certain property exceeds CAD $25,000.
Example
A Canadian resident moves permanently out of Canada while still owning an apartment in Tel Aviv.
The individual has not sold the apartment.
Nevertheless, the Canadian tax adviser needs to examine the departure-tax rules and the property's fair market value at the date of departure.
An Israeli historical valuation can provide the professional evidence required for that date.
Canadian Tax Forms That May Be Relevant
The exact forms depend on the taxpayer and the purpose of the valuation.
T1 General
Income Tax and Benefit Return
The principal individual Canadian income-tax return.
T1135
Foreign Income Verification Statement
Used to report specified foreign property when the applicable cost-amount threshold is exceeded.
T776
Statement of Real Estate Rentals
Used to calculate rental income and expenses.
Schedule 3
Capital Gains (or Losses)
Used to report many capital gains and losses, including relevant real-estate dispositions.
T2091(IND)
Designation of a Property as a Principal Residence by an Individual
Relevant in qualifying principal-residence situations.
T2209
Federal Foreign Tax Credits
Used to calculate the federal foreign tax credit.
T1243
Deemed Disposition of Property by an Emigrant of Canada
Relevant when the departure-tax rules apply.
T1161
List of Properties by an Emigrant of Canada
Relevant to qualifying emigrants who meet the applicable property-value threshold.
T1244
Election to Defer the Payment of Tax on Income Relating to the Deemed Disposition of Property
May be used in qualifying departure-tax situations where payment is deferred.
The client's Canadian tax adviser should determine which forms actually apply.
Canadian Tax Residency & Newcomers
Canadian tax residency is not determined solely by citizenship or the number of days spent in Canada.
CRA considers the individual's residential ties, including a home, spouse or common-law partner, dependants and other relevant factors.
For someone moving to Canada from Israel, residency status can affect:
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Worldwide income taxation
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Foreign-property reporting
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The cost amount used for future T1135 reporting
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The treatment of rental income
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Future capital gains
A valuation of Israeli property at the date Canadian residency begins may therefore be useful in establishing the property's Canadian starting value for relevant purposes.
Canada–Israel Tax Convention
Canada and Israel have a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed on 21 September 2016.
The Convention applies to Canadian and Israeli taxes on income and includes gains from the alienation of immovable property.
Article 6 — Income from Immovable Property
Income derived from immovable property situated in the other country may be taxed in that country.
This includes income from the direct use or letting of the property.
Article 13 — Capital Gains
Gains from the sale of immovable property situated in the other country may be taxed in that country.
The Convention also covers certain shares or interests deriving more than 50% of their value from immovable property situated in the other country.
Article 21 — Elimination of Double Taxation
The Convention provides mechanisms for Canada to give credit for qualifying Israeli tax against Canadian tax on the relevant income or gains.
The exact application depends on the taxpayer's circumstances.
The client's Canadian tax adviser should determine how the Convention interacts with Canadian domestic law and Israeli taxation.
2026 Filing & Payment Dates
For the 2025 Canadian tax return filed in 2026:
These are the general federal deadlines. Different rules can apply to trusts, corporations and other taxpayers.
For a self-employed taxpayer who has a balance owing, the filing extension to 15 June does not extend the April 30 payment deadline.
2026 Filing & Payment Dates
For income received during 2025, the Russian FTS published the following key dates:
These dates concern the 2026 declaration campaign for 2025 income and reporting.
Different deadlines may apply in other circumstances.
Objections & Appeals
If a taxpayer disagrees with a CRA assessment or reassessment, the formal dispute process generally begins with a Notice of Objection.
For an individual, the objection deadline is generally the later of:
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90 days after the date of the notice of assessment or reassessment, or
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one year after the filing deadline for the return
The CRA form commonly used is:
T400A — Notice of Objection – Income Tax Act
If the objection is unsuccessful, the taxpayer may generally appeal to the Tax Court of Canada within 90 days of the CRA's decision.
Where the dispute concerns the value attributed to Israeli real estate, an independent appraisal can become part of the professional evidence supporting the taxpayer's position.
IL APPRAISER does not handle the tax dispute procedure itself. We provide the Israeli property valuation where a valuation issue forms part of the matter.
Beyond Tax Reporting — How We Can Help
An Israeli licensed appraiser property valuation is not only a tax document.
You Are Considering Buying a Property
Before committing to a purchase, we can provide an independent reference point for market value.
This can help you compare:
Asking Price vs. Market Value
and identify questions that may require further legal, planning, engineering or financial review.
You Own a Property and Want to Know the Rental Value
We can assess the property's market rental value.
This may be useful when:
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Considering a new rental
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Reviewing an existing lease
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Comparing rental alternatives
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Planning a purchase for investment
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Reviewing an investment property
You Received an Urban Renewal Proposal
If you have been approached regarding urban renewal / Pinui-Binui / TAMA 38, you may need to understand whether the proposed consideration is appropriate.
From the apartment owner's perspective, an appraisal may examine:
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Existing apartment value
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Proposed consideration
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Size and characteristics of the replacement apartment
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Parking and storage
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Floor and location
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Additional economic components of the proposal
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Market rent during the evacuation period
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Existing appraisal or Standard 21 material
We can provide an independent professional assessment from the owners' perspective.
You Received a Betterment Levy Assessment
The Israeli Betterment Levy ("Heitel Hashbaha") is connected to an increase in land value arising from planning events such as approval of a plan, a relief or permitted exceptional use.
The statutory framework is contained in the Planning and Building Law, 1965, particularly the Third Schedule.
If you have received a Betterment Levy assessment, we can review:
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The valuation date
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The planning event
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The property characteristics
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The valuation methodology
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The market evidence
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The contribution of planning rights to value
Where appropriate, professional valuation analysis may support an objection, appeal or another procedure handled with the legal adviser.
You Are Considering an Investment
A valuation can provide an independent property reference point before you commit capital.
For example, you may want to compare:
Purchase Price
with
Independent Market Value
and separately consider:
Expected Rental Income
against
Market Rental Value
We provide the real-estate analysis. The investment decision remains with the client and their professional advisers.
What Does IL APPRAISER Provide?
Depending on the assignment, the appraisal may address:
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Property identification
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Location and surroundings
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Physical characteristics
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Registered rights
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Planning status
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Building rights
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Existing leases or occupancy
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Comparable transactions
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Rental evidence
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Market conditions
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Valuation methodology
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Market value
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Market rental value
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Historical valuation date
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Supporting analysis
Where the valuation is being prepared for a Canadian professional adviser, we can discuss the purpose, valuation date and any specific documentation requirements before the engagement begins.
Need an Updated Valuation for the Same Property?
Updating an Existing Israeli Property Valuation
If you previously commissioned an appraisal of the same Israeli property, we can review the existing file and, where appropriate, prepare an updated valuation for a new valuation date.
This may be useful when:
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The property becomes relevant to a later tax year
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A property is being sold after several years
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An estate matter has developed
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A previous valuation is no longer current
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A lawyer or accountant needs an updated professional reference point
A previous appraisal is useful background information but does not automatically establish the property's current market value.
A Simple Remote Process
1. Tell Us About the Property
Send us the property's location and explain what you need.
2. We Review the Matter
We determine the appropriate appraisal scope, valuation date and information required.
3. The Appraisal Is Prepared in Israel
Our licensed Israeli appraisers carry out the relevant property and market research.
4. Receive the Report
The completed appraisal can be delivered to you or, where requested, coordinated directly with your Canadian accountant, CPA, tax adviser or lawyer.
For Canadian Accountants, CPAs, Tax Advisers & Lawyers
Have a client who owns property in Israel?
You can refer the client directly to us or coordinate the assignment with us on the client's behalf.
We can assist with:
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T1135-related matters
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Foreign rental-property matters
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Capital gains
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Historical valuations
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Inheritance and estates
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Gift-related valuations
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Departure-tax matters
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Divorce and financial settlements
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Property sales and acquisitions
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Rental-value assessments
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Urban renewal
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Betterment Levy matters
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Multiple Israeli properties
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Updates of previous appraisals
You handle the Canadian legal and tax matter.
We provide the Israeli property valuation.
Professional Resources
Our Professional Guide explains the Israeli valuation process, relevant Israeli property documentation, international tax-reporting considerations and how we work with professional advisers.
Why IL APPRAISER?
Israeli Licensed Appraisers
Independent real estate appraisal carried out in Israel.
Israeli Market Evidence
Our analysis is based on Israeli property, planning and market evidence.
Defined Valuation Date
We identify the relevant date and assess the property accordingly.
Remote Process
The assignment can be coordinated remotely from Russia, Israel or elsewhere.
Professional Coordination
We can work directly with the client's accountant, tax adviser or lawyer.
Valuation Updates
Where appropriate, an existing valuation can be reviewed and updated for a subsequent valuation date.
Frequently Asked Questions
Do all Canadian tax residents who own Israeli property need an Israeli appraisal?
No. The need for an independent appraisal depends on the circumstances, the purpose of the valuation and the applicable Canadian rules.
Does owning Israeli property automatically require Form T1135?
No. T1135 applies to specified foreign property when the applicable CAD $100,000 cost-amount threshold is exceeded. Personal-use property is generally excluded. The client's tax adviser should determine whether the property must be reported.
Is the T1135 threshold based on today's market value?
No. The reporting threshold is based on the property's cost amount, not its current fair market value.
I moved to Canada and already owned my Israeli property. What value is relevant?
For a new Canadian resident, the CRA generally uses the property's fair market value at the time Canadian residency began as the cost amount for future T1135 purposes. The first year of Canadian residency is generally excluded from the T1135 filing requirement for the individual.
Can you prepare a valuation for the date I became a Canadian resident?
Yes. We can prepare a historical Israeli market valuation for a specified residency date, subject to the available market evidence.
Can you prepare a valuation for a Canadian Capital Gains matter?
Yes. We can provide an independent Israeli property valuation for the relevant purpose and valuation date. Your Canadian tax adviser determines how it is used in the tax calculation.
Can you assess the rent I could receive for my Israeli property?
Yes. We can provide a market rental-value assessment based on the property's characteristics and relevant Israeli rental evidence.
What happens to my Israeli property for Canadian tax purposes when I die?
Canadian tax rules generally deem a disposition of capital property immediately before death at fair market value, subject to applicable exceptions and rollovers. An independent Israeli valuation can provide evidence of that value.
Does a gift of Israeli real estate create a Canadian tax issue?
It can. A gift of capital property is generally treated as a disposition at fair market value. Your Canadian tax adviser should determine the applicable treatment.
What happens if I leave Canada while still owning my Israeli property?
Canadian departure-tax rules can deem certain property to have been disposed of at fair market value when Canadian residency ends. An Israeli historical valuation may therefore be relevant.
Can you review an urban-renewal offer?
Yes. We can review the proposed consideration and relevant property and market information from the owners' perspective.
Can you help with a Betterment Levy?
Yes. We can review the valuation underlying the levy and identify potential professional valuation issues that may support the appropriate legal procedure.
Can you work directly with my Canadian accountant or CPA?
Yes. We can coordinate directly with professional advisers according to your preference.
Can you update an old Israeli appraisal?
Yes. We can review the previous valuation and, where appropriate, prepare an updated appraisal for a new valuation date.
Need an Israeli Property Valuation?
Whether the matter concerns Canadian tax reporting, T1135, rental income, capital gains, inheritance, a gift, a move to or from Canada, a sale, a rental decision, an urban-renewal proposal, a Betterment Levy or another property matter, we can review the case and determine the appropriate appraisal scope.
Important Notice
This page provides general professional information about Israeli property valuation for Canadian tax residents. It does not constitute Canadian, Israeli or international tax, legal or financial advice.
Canadian and Israeli tax rules, reporting requirements, procedures and deadlines may change and may depend on the taxpayer's individual circumstances, residence status, ownership structure and the type of transaction.
The client's Canadian and/or Israeli tax or legal adviser should determine the applicable tax treatment, reporting requirements and legal procedure.
IL APPRAISER provides independent Israeli real estate valuation services.
