The Step-by-Step Guide to Buying Properties in Israel

Buying property in Israel can be a rewarding and fulfilling experience. Whether you are looking for a new home, an investment, or a holiday residence, the Israeli property market offers diverse options to suit your needs.

However, navigating the purchasing process can be challenging, especially if you are not familiar with the intricacies of the Israeli legal and financial systems. To help you through this journey, we have compiled a comprehensive list to make your property purchase in Israel as smooth and successful as possible.

Research the Property Market.

The first step in purchasing a property in Israel is to familiarize yourself with the various regions, neighborhoods, and property types available in the country. Start by researching online, reading local news articles, and visiting real estate websites.

It’s also helpful to speak with local residents and real estate agents to get a sense of the market trends and potential investment opportunities.

Determine Your Budget and Financing Options.

But before you start looking for properties, assess your financial situation and establish a budget for your purchase. If you require financing, research the various mortgage options available as a foreign or local buyer in Israel.

Israeli banks typically offer mortgages to foreign buyers up to 50-60% of the property’s value, while local buyers may be eligible for higher financing rates. Be aware that interest rates and mortgage terms can vary significantly between banks, so it’s best to shop around to find the deal that’s worth it.

Hire a Local Real Estate Agent.

Working with an experienced local real estate agent can simplify the property search significantly. An agent will help you identify suitable properties based on your preferences, budget, and any other specific requirements you may have.

They can also provide valuable insights into the local property market and assist with negotiations when you find a property you wish to purchase.

Consult a Local Lawyer.

It’s crucial to have a local Israeli lawyer to represent your interests during the property purchase process.

Property law in the country can be complex, and an Israeli lawyer will help you navigate the legal requirements, review contracts, and ensure that you are protected throughout the transaction. Choose an Israeli law firm that specializes in real estate and, if necessary, one fluent in your language.

Obtain an Israeli Tax Identification Number.

As a foreign buyer, you must obtain an Israeli tax identification number (known as a Teudat Zehut) from the Israeli Tax Authority. This number is required for various transactions related to the property purchase, including opening a bank account and registering the property in your name.

Conduct Thorough Due Diligence.

Prior to signing any contracts or making any payments, it’s essential to conduct thorough due diligence on the property you wish to purchase.

This includes verifying the property’s ownership and legal status, checking for any outstanding debts or liens, and ensuring that all necessary permits and approvals have been obtained. Your attorney can assist you with this process.

Negotiate and Sign the Purchase Contract.

Once you have found a property to buy and conducted due diligence, the next step is to discuss the terms of the purchase with the seller. This may include negotiating the price, payment terms, and any other conditions of the sale.

Once an agreement has been reached, your lawyer will draft the purchase contract, which should be reviewed carefully before signing.

Open a Local Bank Account.

As a foreign buyer, you will need to open a local bank account in Israel to manage your property-related transactions. This may include transferring funds for the property purchase, paying taxes and fees, and receiving rental income if you plan to rent the property.

Transfer Funds and Pay Taxes and Fees.

After signing the contract, you will be required to transfer the funds for the property purchase to your local bank account. In addition to the purchase price, you should also budget for various taxes and fees associated with the property transaction.

These may include purchase tax, lawyer’s fees, agent’s fees, and registration fees. Your attorney can advise you on the amounts and payment procedures for each of these expenses.

Register the Property in Your Name.

Once the funds have been transferred and all taxes and fees have been paid, the final step is registering the property in your name at the Israel Land Registry (known as the Tabu). Your lawyer will submit the necessary documents and fees on your behalf once the registration process is complete.

Conclusion.

Purchasing property in Israel can be a rewarding and exciting experience, but it’s necessary to be well-prepared and informed throughout the process. Following this checklist and working with experienced Israeli law firms can ensure a smoother and more successful transaction.

Take your time researching properties, negotiating terms, and understanding the legal and financial aspects of the process. With patience and diligence, you can find the perfect property in Israel to call your own.

If you’re in need of an Israeli real estate lawyer, look no further than Eli Shimony Law Office. We specialize in real estate law, class action, and investment matters, offering our clients easy-to-understand consultations and dedicated legal guidance in Israel. Get in touch with us today for more information!

Eli Shimony – Israeli law firm represents clients on all legal matters in Israel. For any questions please contact us and we will be happy to assist.
By email: [email protected], By phone: +972-52-2769773, +972-3-5507155.
The above is only general information and does not replace legal advice which is usually necessary before taking legal proceedings.