The allure of Israel, with its rich history, vibrant culture, and stunning landscapes, draws people from around the world to consider purchasing property there. While the process may seem daunting for foreigners, it’s easier than most people imagine, especially with a knowledgeable real estate attorney and some personal connections in Israel. Let’s explore the steps and considerations involved in buying land in Israel as a foreigner.
The Land Law in Israel and Foreign Ownership
The Land Law in Israel allows foreigners to purchase land under certain conditions. The process is similar to buying property in many other countries, with a few key distinctions. The Israeli government welcomes foreign investment in real estate and recognizes its economic contribution.
Types of Land in Israel
Before delving into the process, it’s essential to understand the different types of land available for purchase in Israel:
- Private Land: This is the most common type of land available for purchase by foreigners. It includes residential, commercial, and agricultural land.
- State Land: The Israeli government owns a significant portion of land in Israel. While foreigners can lease state land for extended periods (usually 49 or 99 years), outright ownership is generally restricted to Israeli citizens.
- Israel Land Authority Land: The Israel Land Authority (ILA) manages state land. Foreigners can participate in tenders and auctions for the right to lease ILA land.
Buying Process of an Israeli Land
Engage an Israeli Real Estate Attorney
The complexities of Israeli real estate law necessitate the expertise of a qualified attorney specializing in this field. At Aharoni Law Firm, our attorneys have a deep understanding of the legal requirements, ensuring compliance with regulations, and protecting your interests throughout the transaction. You can rest assured that you’re in good hands.
Find Land for Sale in Israel
Several resources can help you find land for sale in Israel:
- Real Estate Agents: Aharoni Law Firm real estate lawyers specialize in working with foreign buyers. We can provide valuable insights into the market, help you find suitable properties, and negotiate on your behalf.
- Online Listings: Numerous websites list land for sale in Israel, allowing you to search based on your preferences and budget.
- Word-of-Mouth: Networking with friends, family, or business contacts in Israel can also lead to potential land opportunities.
If you cannot be physically present in Israel throughout the buying process, you can grant power of attorney to a trusted representative at Aharoni Law Firm. Israeli attorney Rahav D. Aharoni has almost 20 years of experience, is native in Hebrew and fluent in English, and can act on your behalf.
Contact Our Real Estate LawyerConduct Due Diligence
Before committing to a purchase, thorough due diligence is crucial. This includes:
Verifying Ownership
Ensure the seller has a clear title to the land and the right to sell it.
Checking Zoning and Planning Restrictions
Understand any limitations on how the land can be used or developed.
Assessing Environmental Factors
Investigate any potential environmental concerns that could affect the land’s value or use.
Open an Israeli Bank Account
To purchase land in Israel, you’ll need an Israeli bank account. This will facilitate the transfer of funds and payment of taxes. To open an account at an Israeli bank, you will need:
- A photo ID,
- A valid passport,
- Various financial forms, such as a W-9 form as a U.S. citizen.
When you transfer money into your new Israeli bank account, you must explain your relationship to the account where the money is transferred. The bank will require documentation to verify your relationship to the deposited funds.
For example, if you are approved for a mortgage or other loan in your home country, your bank will need a copy of the loan agreement. Consider taking out a mortgage at home, as it can take longer to take out a mortgage from an Israeli lender successfully.
Sign a Purchase Agreement
Once you’ve found suitable land and completed due diligence, you’ll sign a purchase agreement with the seller. This legally binding document outlines the terms and conditions of the sale.
Pay the Purchase Tax
As a foreigner, you’ll be subject to a purchase tax based on the value of the land. The tax rate varies depending on whether you’re a resident or non-resident and the property’s value.
You must pay a purchase tax based on the value of the property you purchase. The tax increases in higher brackets for non-residents, with homes valued between 1.29-3.88 million NIS paying a 6% tax, up to the 10% tax for homes valued over 17.83 million NIS.
However, suppose you don’t already own any property and can demonstrate that Israel is your “center of life” with family, friends, and employment. In that case, you may qualify for a reduction in the purchase tax with a higher tax threshold beginning at 1.74 million NIS. The ‘center of life’ concept refers to your primary residence and the place where you spend the majority of your time and have your social and economic ties.
Register the Land
After completing the purchase, you must register the land in your name at the Land Registry Office. This establishes your legal ownership of the property.
In Conclusion:
Buying land in Israel as a foreigner is achievable with careful planning and professional guidance. By understanding the process, conducting thorough research (such as property values, zoning regulations, and tax implications), and seeking expert advice, you can navigate the complexities of the Israeli real estate market and realize your dream of owning land in this remarkable country.
Contact An Experienced Israeli Lawyer for a Free Consultation
If you’re considering buying land in Israel, remember that you’re not alone. Our experienced Israeli real estate attorneys at Aharoni Law Firm are here to provide expert guidance and support throughout the entire process, ensuring a smooth and successful transaction. Call us at 888-923-0022 (United States) or 972-3-9055478 (Israel) or contact us online to schedule a complimentary consultation.
