Purchase tax is paid from your own money, not from the mortgage, so it is part of the equity you must have. It is computed in brackets like income tax: each slice of the price is taxed at its own rate. The 2026 amounts come from Tax Authority directive 1/2026.
For a resident's only home the scale is 0% up to ₪1,978,745, 3.5% up to ₪2,347,040, 5% up to ₪6,055,070, 8% up to ₪20,183,565 and 10% above that. An additional home pays 8% up to ₪6,055,070 and 10% above. Olim buying a single home within 7 years of aliyah get a long 0.5% band instead of the 3.5% and 5% bands, under regulation 12A of the purchase tax regulations.
The pitfall is filing late or not claiming the relief: a late declaration carries a fine of ₪310 for each two weeks of delay, and the oleh relief is claimed in the declaration with a request for partial exemption. Check your own number with the Tax Authority's simulator before you sign.
Example
On a ₪2,500,000 home the tax on a resident's only home is about ₪20,538, against about ₪2,606 on the oleh scale, a saving of about ₪17,900. On ₪4,000,000 it is about ₪95,538 against about ₪10,106.