Cost of Living set to spike in Israel for 2025 – Here's what you need to know

Israeli households are bracing for a wave of price increases in 2025, with significant hikes announced across utilities, property taxes, and social security contributions, according to government announcements today.

A typical Israeli family can expect their annual expenses to increase by approximately $400 (1,500 NIS), with monthly bills rising by about $32 (120 NIS). The increases affect several key areas:

- Property Tax: 5.29% increase

- Electricity rates: 3.8% increase

- Water bills: 3.4% increase

- Value Added Tax (VAT): 1% increase

- National Insurance contributions: 0.8% increase

"These increases will disproportionately impact lower-income households," says financial security expert Hanan Tzaig. "While an extra $30-50 per month might be manageable for middle-class families, it represents a significant burden for those already struggling to make ends meet."

To help families manage these increased costs, Tzaig recommends three essential financial management strategies:

First, implement strict budget tracking, particularly for major expenses like loans and mortgages. "Even households with comfortable incomes should maintain detailed spending records to ensure financial stability," Tzaig advises.

Second, consider mortgage refinancing. With rising costs across the board, extending mortgage terms could provide needed monthly relief. This option is available to all mortgage holders in Israel.

Finally, avoid emotional spending. "Focus on necessities and take advantage of available discounts and benefits," says Tzaig. "In times of rising costs, every shekel counts."

The new rates will take effect from January 2025, giving households several weeks to adjust their budgets and prepare for the increased cost

Channel 14 contributed to this article.