Cost of Living in Israel

The view from Tel Aviv skylineThe cost of living in Israel varies from high to mid-level, depending on where in the country an expat decides to settle and what lifestyle they aspire to. Urban centres are more expensive than desert outposts or mountain towns. Tel Aviv, Israel's most cosmopolitan destination, is ranked 19th in Mercer's Cost of Living Survey for 2016, claiming a cost of living higher than both Paris and Milan.
Wages in Israel tend to be low, despite the fact that the government offers numerous incentives and salary subsidies to new immigrants in accordance with the process of aliyah (the right of return).

Expats will find taxes in Israel exorbitantly high, with both import taxes and excise taxes leaving buyers bearing the brunt of costs. Taxes in Israel are significant enough of an issue for many expats moving to Israel to bring certain products - like electronic goods - with them.

Cost of accommodation in Israel

The cost of accommodation in Israel varies depending on location, but this will certainly be an expat's largest expense.

Until recently, the cost of buying property in Israel was much more reasonable than in Europe and the US. Over the last few years, though, house prices have increased at double-digit rates. Foreign interest in the market has played a role in lifting prices, and many young couples find they have to rent for longer than they had hoped.

Rental prices in Israel have remained relatively stable despite the large increase in the sale price of properties. For the wallet weary, house-sharing is still a popular option and a great way to pinch a few pennies for those who don't mind living with strangers.

Cost of food and entertainment in Israel

The cost of food in Israel is reasonable if eating in, but expensive if dining out. Fresh fruit and vegetables are cheap and, as Israeli culture supports haggling, there's often a bargain to be won. Dry goods and meats can end up a bit more on the expensive side, however.

On the other hand, going out for dinner or even indulging in a drink or two after work can quickly burn a hole in one’s pocket. Designer cocktails are obscenely overpriced and even entrance into the dingiest of clubs can cost a shekel or two. That said, hefty costs don't discourage anyone from enjoying themselves.

Tickets for cinema, music concerts or other avenues of entertainment are similarly expensive.

Cost of transport in Israel

Owning a car in Israel is extremely expensive. The Israeli government does offer benefits to new expats who decide to buy a car, but there are stipulations relating to the number of years the car must be owned and the number of people who can drive it. Petrol is becoming prohibitively expensive, and it's necessary to pay approximately 90 percent tax on a vehicle.

Most locals and expats use public transport to get around in Israel, which primarily consists of trains and buses. Fares vary depending on distance and the route travelled.

Individual inter-city taxis can be expensive, but can be a good option for getting from point A to point B in a large group.

Cost of living chart for Israel

(Note that prices may vary depending on product and service provider and the list below shows average prices for Tel Aviv in November 2016)

Accommodation (monthly rent)
Two bedroom apartment in city centre ILS 8,200
Two bedroom apartment outside of city centre ILS 7,000
Food and drink
Dozen eggs ILS 16 
Milk (1 litre) ILS 6.50
Rice (1kg) ILS 9
Loaf of white bread ILS 5
Chicken breasts (1kg) ILS 35
Pack of cigarettes (Marlboro) ILS 34
Eating out
Big Mac meal ILS 45
Coca Cola        ILS 8.50
Cappuccino  ILS 13
Bottle of beer (local)     ILS 10
Three course meal at a mid-range restaurant ILS 100
Utilities/household (monthly)
Mobile call rate (per minute – mobile to mobile) ILS 0.35
Internet (Uncapped ADSL or cable – average per month)  ILS 85
Basic utilities (Average per month for standard household) ILS 780
Taxi rate/km  ILS 5
Bus fare in the city centre        ILS 7
Gasoline (per litre) ILS 7

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