Can You Buy Real Estate In Israel If You Are An American?
An Insider Look At What It Takes To Own Prime Real Estate In Israel
1. What are the restrictions on foreigners buying or investing in real estate in Israel?
Israel is one of the hottest real estate markets in the world, with Israeli real estate consistently yielding double-digit returns over relatively short timeframes. This is in part due to the international nature of Israeli real estate markets. But there are issues to be aware of: Municipalities impose taxes on vacant apartments as a way of motivating landlords to take advantage of their housing stock rather than letting it remain empty. In addition, it necessary to do due diligence to ensure that a real estate investment is truly what it appears to be.
1) The buyer and the seller will have to pay a commission on the property they want. The standard commission for buying and selling a property is 2%. The buyer can choose an agent to work with before they look at the property, or they can choose an agent that is already showing the property.
FYI: The actual negotiations are going to be held not just between you but also between the agents who are on the property listing.
2) Buyers are also encouraged to consult with the agent about what is included in the purchase. Some homes come with just the bare minimum, while others will come with everything associated with the house.
3) Everything is turned over to the real estate lawyer working for both the client and homeowner( if there is one). The real estate lawyer is there to make sure everything goes smoothly, including any improvements that need to be made on the house. The lawyers are also there to ensure that the proper permits have been obtained to authorize the work that has to be completed and to flag any issues for the architects or builders or project managers to deal with.
4) Lawyers’ fees typically are a percentage of the purchase price – from 0.5% to 1% of the purchase price, depending on the complexity of the transaction. There are appreciation and acquisition taxes that are due too. For new Olim, some tax rebates are available.
FYI: Everything should be discussed with your attorney to avoid any confusion.
2. What the Israeli Land Administration has to say
They established a council, a few years back, which helps to establish the necessary rules for buying and selling. They have a specific set of requirements for those who want to buy property in Israel, though the land is only 80% state-owned. American citizens have to go through the council to determine which property they can buy and why.
3. Do you need to become a resident? What about zoning restrictions and building rights?
Some communities have residence restrictions – especially Kibbutzim and Moshavim – of which you need to be aware before purchasing. Others have zoning restrictions that can limit what you can do with purchased land. Zoning laws needs to be closely examined for each property, as does the issue of additional building rights, which can be very valuable because they allow you to expand to your property to the extent of the building rights.
Consult A Israel Real Estate Lawyer Today
Visit davidpagelaw.com for more information and to find a great real estate lawyer to help you understand and navigate through the nitty-gritties of real estate in Israel.