Buying property in Israel can have a big potential – but also can be challenging for a non - residents. It will benefit you to work with an Israeli law firm that has experience with US, UK and other non-resident clients regarding Israeli real estate transactions also on behalf of individuals and families that are planning a move to Israel as well as on behalf of foreign investors who are interested in acquiring assets in the Israeli real estate market. A diligent attorney will know exactly how to excel Israeli real estate purchase and take steps to ensure that the transaction moves forward and concluded as smoothly as possible.
With offices in New York, Florida, Los Angeles and Tel Aviv, Aharoni Law Firm can provide the legal guidance and representation that you need. Our founding attorney, Rahav D. Aharoni, Adv is an Israeli native with more than two decades of experience in Israeli real estate transactions, evaluations and contracts. He will personally oversee every aspect of your case and ensure that we meet all of your goals. Please contact us today for a complimentary consultation and learn more about how we can assist you.
What Types of Property Are Available in Israel?
If you are a foreign citizen, your first step in buying property in Israel will be to understand the different types of property within the country. Israeli real estate falls into two general categories:
- State-owned land (Israeli Land) – This type of property is owned by the State of Israel and administered by the Israel Land Administration (ILA). Roughly 93 percent of Israeli land falls in this category, The Jerusalem Post notes. It includes land owned by the Development Authority as well as the Jewish National Fund. Several restrictions apply to property in this category. If you are seeking to buy or lease state-owned land in Israel, Aharoni Law Firm will advise you of your options.
- Privately owned land – The laws which apply to this type of property are much less restrictive than those which apply to state-owned land. Generally, private property owners can sell the property to others, regardless of whether they are Israeli citizens or foreign citizens, Jewish or non-Jewish. This property can include previously owned homes or apartments as well as newly developed housing. Most of the real estate transactions which we represent clients are privately owned property.
Can a Foreign Resident Buy Property in Israel?
Yes. If you currently live in the United States, Canada, United Kingdom or any other country, you can purchase privately owned property in Israel. You will not need to travel to Israel in order to make the purchase. You will need to sign the purchase contract in Hebrew and in your language, a Power of Attorney and an Israeli Acquisition Tax Rate declaration. You can do this at any Israeli Consulate in your country of residence and we will guide you accordingly.
What Are the brackets Purchase Tax of Buying Property in Israel ?
You can face numerous types of purchase costs when you buy property in Israel, including real estate agent fees that in many cases we are saving to our clients. Appraiser fees and mortgage fees. The biggest cost will be the acquisition tax (or "purchase tax") that you pay in New Israeli Shekels (NIS). If you are a foreign citizen, this tax may be higher than what an Israeli citizen would pay for property with roughly the same value. You must typically pay this tax within 45 days of signing your contract of purchase.
The acquisition tax rates are based on the total purchase price of the property. The rates are adjusted every January to reflect the Israeli Consumer Price Index.
We will advise you of the current acquisition tax rate that will apply to your purchase. As of January 2020, those rates are:
It's important to note that Israeli real estate law defines a single home owner as one who owns less than 33 percent of an initial property in or outside of Israel. You will be deemed to be a multiple home owner if you own more than 33 percent of the property in or outside of Israel.
Additionally, you can qualify for the reduced tax rate for up to seven years of aliya, or if you buy your property within one year prior to making aliya. If you are married, you can be eligible for the lower acquisition tax rate if either you or your spouse becomes an oleh.
What Should You Consider Before You Buy Property in Israel?
Before you buy property in Israel, you should take several factors into consideration. Some of those factors include:
- Local housing prices
- Municipality tax rates
- Potential property value appreciation.
If you are an English speaker (or still in the process of learning Hebrew), you may find it easier to adjust to your new home if you live in an urban area such as Jerusalem, Tel Aviv or Haifa. However, you may also find an exciting opportunity in a moshav, kibbutz.
In addition to handling your legal needs, we can assist you with finding many local resources that will help you to find the property that meets your goals and ease your transition. We can also assist with finding the right mortgage for your situation and the transfer of funds from abroad to complete your purchase. Our high level of service is among the many advantages that come from working with an Israeli law firm that has a deep background in Israeli real estate transactions.
How Does Property and deed Registration in Israel is completed?
The most important step that you will take in the purchase of an apartment, home or other property in Israel will be to properly register the property in your name. Registration will allow legal right to the property to be transferred from the seller to you as the buyer. Without it, the transfer of ownership rights will not be complete.
If you buy privately owned property, then you will do this through the Israeli Land Registration Office, which is commonly called "The Tabu." The registration process works differently if you buy property that is still in the process of being developed, or if the land is state-owned.
To register the property and the deed with The Tabu, you will need to submit the registration in the office where the property is located. The Tabu has nine Land Registration offices, or bureaus, which are located in Jerusalem, Tel Aviv, Haifa, Petach-Tikva, Nazareth, Netanya, Beersheba, Holon and Rehovot. It also has three extension offices in Hadera, Ashdod and Acre. Once registration is complete, the office will issue a Tabu deed (title).
The registration process can take an average of 3-4 months. For this reason, after you sign the purchase contract, we need to register a cautionary note on the same day of the first payment. This note will protect your rights as a buyer against anyone else who may try to assert a right regarding the property.
We can handle every aspect of the registration process on your behalf, including the registration of a cautionary note. Additionally, before you buy the property, we can research the record for the plot (or sub-plot) in the Land Registry. This information can include:
- The property's current and historical registered owner/s
- The registered size and dimensions of the property
- Any liens, mortgages, easements, rights of use and/or passage or appropriations by public authorities on the property.
It will be important to have a signed and authenticated Land Registry Deed (Tabu) Extract before you buy any property in Israel. This is the only official extract.
Aharoni Law Firm Focuses on Israeli Real Estate Law
With our deep background in Israeli real estate law, Aharoni Law Firm can provide a variety of services to our clients, including:
- Searching the legal rights and title connected to the property through the appropriate registry (or registries) and gathering all relevant documents, including the official extract, before you purchase the property.
- Providing help with obtaining and negotiating the terms of a mortgage, including a mortgage for a second home in Israel.
- Preparing contracts for the purchase or sale of real estate in Israel, including handling all negotiations and signing procedures.
- Registering and transferring all property rights under all relevant Israeli authorities.
- Providing legal representation in an Israeli court if any disputes arise related to land, title and real estate.
- Any Israeli tax matter related to non-residents including appeals if necessary.
We work hard for our clients and we take pride in providing highly skilled and personalized service to our real estate clients in Israel as well as in the United States, Canada, United Kingdom and countries around the globe. Please reach us to discuss how we can assist you with purchasing property in Israel, please call or reach us online today.