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Common questions about buying property in Israel

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Are you looking to buy a property in Israel? We have summarized some of the most common questions we get asked by potential buyers living abroad. We realize that finding the right investment, at the right price is just the beginning of the journey, it can be a little overwhelming, especially when you live overseas- so hopefully these answers will shed some light!

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Common Israel Real Estate questions answered.

Are you looking to buy a property in Israel? We have summarized some of the most common questions I get asked by potential buyers living abroad.

1. Can I buy realestate in Israel if I live in a different country? The answer is YES! A foreign investor can take outa mortgage of up to 50% of the purchase price. It’s possible to get a mortgagein the currency of your choice (Shekels, Dollars, Euro, and Pound) for a periodof up to 30 years or until the age of 80.
2. How much do I have to put down to secure a property in Israel?
You will be required to put down 50% of the purchase price but if it’s a new development (pre-construction project) between 15 – 20% is payable to secure the deal. 35% -30% is then payable during the development cycle. The balance of 50% is due on completion which can be financed from a mortgage.
3. What are the additional costs that should be factored in to my budget?

  • The purchase tax of the property – A base of 5% purchase tax (recently lowered from 8%), this scales up based on thepurchase price.
  • Legal fees- Lawyers’fees are approximately 1.5% + VAT
  • Agents/ promotors fee – Depending on the real estate deal a buyer will pay between 2%-5% + VAT in promoters’ fees to the agent.
  • Government Building Index -This is effectively interest that the government allows developers to charge on any outstanding funds while the property is being built.


4. What are the advantages of purchasing in a new development (off-plan) as appose to an existing property?
It depends on the individual circumstance but if you are looking to invest in aproperty and there is no urgency to move in immediately, purchasing in a new development allows the flexibility of more time to fund the investment and to add your input into the design and finishes. If buying an existing property,you would need to have at least 50%of the funds available immediately.  Most new developments require the buyer to secure the purchase with a 15% – 20% deposit and then stagger thebalance of the payments, some only requesting the balance on delivery of theproperty.

5. Are there additional taxes once I own the property? Yes, as a property owner you will be obliged to pay 10% income tax on rental income, if the rental income is over NIS 5,070 and 25% capital gains tax if andwhen you sell property.

6. Are there additional benefits if I am making Aliyah?
Yes, a new immigrant is entitled to a reduction in the Purchase tax and an Israeli citizen buying a first property will be entitled to higher mortgages dependingon circumstances. If you are planning on making Aliyah and buying a home in Israel, it is important to consider when to take out the mortgage – either before or after making Aliyah- one should consult with a mortgage specialist in this case.
7. Can I transfer money to Israel from abroad to an account in Israel?
A foreign citizen can open an account in any Israeli bank, and subject to the specific procedure, there are no substantial restrictions on opening such accounts at the moment. When transferring funds the account holder will have to explain their relation to the account abroad from which the transfer is made.

If you’d like to learn more, or speak to a consultant email: info@hold.co.il 

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