Real Estate Transactions in Israel
Israel’s real estate market has been booming for decades. Real estate prices have been rising constantly both in centric as well as in outlying areas of the country. Other than in Europe, new construction projects can be seen all over Israel. However, cultural differences, the language barrier and the local maze of authorities often present a major challenge for foreign investors, sellers and buyers.
In our law offices, you have found a competent partner in Israel who accompanies you with your real estate transactions from the beginning until the very end. Our knowledge and practical experience in property law allow us to execute complex, international transactions and reach the results our clients desire.
Apart from handling large scaled real estate transactions, we also support our international clients with the purchase of a second home in Israel and prevent bad surprises with our due diligence. Firmly we represent you vis-à-vis the constructor, banks and authorities such as the land registry and tax offices.
We offer well-founded legal advice in English throughout all the phases of a real estate transaction. In the prephase we can order an appraisal of the property.
As sellers we find your best buyer. We negotiate and draft the contracts according to your needs and wishes and then, execute them for you. For the receipt of the purchase price, we can open an escrow account for you. If necessary, we enforce your contractual claims in court or out-of-court proceedings.
Translations of important documents related to the transaction, such as the purchase contract, power of attorneys and excerpt of the land registry, are part of our service, too.
For real estate transactions in Israel, it is essential to take into account the taxes that are due in connection with the transaction. Basically, Israeli law knows three kinds of real estate transfer taxes:
First, there is the real estate purchase tax, which is owed by the buyer. The tax rate is scaled, depends on various factors and sums up to 0% – 8% of the sale price.
Further, there is a property gains tax, which has to be paid by the seller. Tis tax amounts to 25% of the added value of the property, i.e. of the difference between the value of the real estate sold and when originally purchased. In certain cases, tax exemption can be requested, but foreigners do not usually get such tax exemption.
Finally, there is a betterment tax. This tax accrues on the added value of a property due to municipal construction plans. The tax sums up to 50% of the planning property gain.
The details of Israeli ground tax legislation are very complex. We explain the tax consequences of your planned real estate transaction to you and advise you comprehensively.