Buy a property in Israel

Legal steps: property certificate, sold rights, identities...

Buying an apartment or a house in Israel is a complicated process which needs a lawyer. First of all, the seller has to give a property certificate or a legal document in order to verify the fact that he is the real owner. Indeed, you have to register an acquisition in the land registry.
Capital information must be known, like if the apartment is empty or not, if it is mortgaged, if the sale was done by the owner or the succession, if there are some restrictions, if there is a chart to respect in the building, if a common area is attached (garden, park, cellar…).
Finally, the lawyer has to verify identities, as the seller as the buyer, for example to know if they are people or firms, if they are Israeli or not…

Expenses

Each transaction generates expenses.
The seller has 50 days to pay the capital gain property tax until 25% of the nominal benefit, and the sale tax (2,5%). The seller can be exempted if the property is for habitation where no commercial activity can be done.
On his hand, the buyer has 50 days to pay the acquisition tax (from 0,5% to 5% for apartments). New immigrants have a tax allowance of 0,5% (valid for 7 years). It’s the same for disabled people or those who lost a family member during war. For other properties, the tax is 5%. Other tax for recording is 100 to 500 NIS in excise.
For other expenses, there is the real estate agency (2% to 3%) and the lawyer to pay (0,5% to 2,5%).
If the owner sells an apartment each 4 years, there is no capital gain property tax of 20%. The apartment must be clean, its owner must be private, and only for living. You have 30 days to make the exoneration request to the taxation authorities.

Financing

If you want to invest in Israel as a tourist, bank loan is easy to receive. Bank interest is about 6% and you have to put in 30% cash. Don’t forget to ask for a receipt that allows you to have the loan.

Signing

Convention must be sign in. Generally a first contract is made to define terms and conditions. Think about a lawyer to do that, because you will be engaged, especially for taxes.
In most of cases, prices are in NIS, which mean buyer must change. If the price is put in dollars, it can be paid in NIS and the change will be done in function of the Israeli Bank average rate.
Foresee a margin since the change costs (for commission).
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