Purchasing Real Estate in Israel
Owning property in Israel is a special privilege. However, the road to purchasing real estate in Israel can be fraught with complications if you’re not aware both of the process and your obligations.
There may some be differences in the process depending on the kind of real estate you are purchasing, and its location. Whether you are considering buying on a moshav, or direct from a contractor, or building your own home, or buying a second-hand apartment, or just the land, or commercial real estate etc., you need to know how to navigate the system for that particular property..
Your real estate lawyer will help you understand and complete all the necessary stages.
Before you proceed with purchasing real estate in Israel, your lawyer will do a title search to ensure that the sellers have the right to sell the property. In Israel there is no title insurance and this responsibility falls on the shoulders of your lawyer.
You will also need to check whether the property has all the required permits and whether there is any illegal building. If there is a problem, your lawyer will deal with any paperwork involved.
Before you sign the contract you will need to ensure that the property is clear of any and all debts, including any mortgages.
When negotiating the contract, be sure that your lawyer knows about any potential payment complications you may have. Payment schedules here are not typically similar to those in either the US or UK, and late payments may incur fines of tens of thousands of shekels.
Your lawyer will also assist with your mortgage paperwork as needed. Mortgages are typically more complicated in Israel than in some other countries, and any mistakes may cause you to be unwittingly in breach of contract.
In addition to all the specialized legal work, your lawyer should also be able to advise you on any tax implications of your purchase. You will need to pay purchase tax, but over and above that, you and your lawyer should consider tax planning for the future. It may be, for instance, that it would be wise to register the property in a particular name, and possibly in a trust, so that you can minimize any purchase tax, capital gains tax, or income tax at various stages during and after the transaction.