Buying a property in Israel ? 5 important points before your first step.

Signature on a purchase contract

Buying a property is an important decision that requires careful attention to detail. Here are some points to consider before signing a purchase contract and why it is essential to be accompanied by a lawyer specialized in real estate:

1. Proper identification of the property:

Before signing a purchase contract, it is essential to ensure that the property is properly identified. Accurate identification ensures certainty as to the nature and characteristics of the property being sold. A Lawyer can perform the necessary checks to confirm the accuracy of the property identification.

2. Tax bracket update:

It is critical to understand the tax brackets and the amounts associated with the acquisition tax. The brackets are updated annually, so it is important to know the latest tax information. A lawyer can explain the tax brackets in detail and help you assess the financial implications.

3. Acquisition tax reduction :

Depending on your specific situation (resident or foreigner, first or additional purchase, new immigrant, etc.), it may be possible to reduce the amount of the acquisition tax. A lawyer specialized in real estate will be able to advise you on the possibilities of reducing the acquisition tax and guide you in the steps to follow.

v First time buyer – Israeli resident:

Please note that in order to benefit from this abatement, you must be an Israeli tax resident or become one within a maximum of 2 years after the acquisition.

  • 0% tax for properties with a value of 0 to 1,919,155
  • 3.5% tax for property valued between 1,919,155 and 2,276,360
  • 5% tax on property valued between 2,276,360 and 5,872,725
  • 8% tax on property valued between 5,872,725 and 18,416,900
  • 10% tax for property worth more than 19,575,755

v Foreign resident or Israeli resident acquiring additional Property:

It should be noted that a foreign resident who makes Aliyah within two years of his or her acquisition may claim a refund of the acquisition tax in Israel, based on the calculation of the acquisition tax of an Israeli resident making the first acquisition.

  • 8% tax for property with a value of 0 to 5,872,725
  • 10% tax for property with a value of more than 5,272,725

v New immigrant (Ole Hadash):

  • 0.5% tax for property valued between 0 and 1,928,220
  • 5% tax on property valued at more than 1,928,220

4. Verification of easements and rights attached:

It is important to verify easements and rights attached to the property, such as parking rights, storage, roofs, terraces, gardens, etc. A lawyer can review relevant documents, such as the register of common property, to ensure that all rights and restrictions are clearly defined.

5. Tax Planning Advice:

A real estate lawyer can provide tax planning advice to optimize your financial situation in the event of a purchase or resale. By carefully planning your real estate transaction, you may be able to benefit from reduced tax payments or even a total exemption in some cases.

Finally,

It is strongly recommended that you exercise caution and vigilance before signing a real estate purchase agreement. Hiring a real estate lawyer will allow you to benefit from valuable legal advice, avoid potential pitfalls and ensure a safe real estate transaction with no surprises.

Rubens Mouly,

Lawyer & Founder of Rubens Mouly Law Office.

*The articles published on this site are not intended as personalized legal advice, but rather as general information sources. For specific legal advice, please contact our firm. We are available to answer any additional questions you may have.

Facebook
Twitter
LinkedIn
WhatsApp
Skip to content