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Buying property in Israel

If you considering buying residential property in Israel, whether as an investment, as a vacation apartment or as permanent residence, there are a number of peculiarities – specific to Israeli law – that are important to bear in mind:

Israel has one of the fastest growing real estate markets among the developed countries. The residential real estate market in Israel has been growing constantly while the apartments’ prices more than doubled over the past 12 years. As a result of land scarcity, high population growth, low interest rates, and the fact that the government strongly relies on the real estate market as one of its main tax collection sources, this may be unlikely to change any time soon.

However, when buying real estate in Israel, one cannot merely rely on market trends but must consider the merits of a particular transaction, and to make sure that it is properly executed. This will not be easy for anyone who is not deeply involved in the Israeli market and does not have much experience in the prevailing practices.

Buying property in Israel – Hire an Appraiser

Almost every real estate transaction in Israel is accompanied by an attorney, usually by two separate attorneys representing the buyer and the seller. The attorney’s job is to protect your interests when drafting the contract, to prevent fraud, to ensure the legality of the transaction, to ensure correct tax reports and payments and to register the transaction with the land registry authorities.

More diligent attorneys will also recommend that you hire an appraiser to assess the commercial prudence of the transaction and in some cases to hire a building engineer to examine the condition of the property. In general, it is considered to be the buyer’s responsibility, to check the property and to assess its legal and physical properties, before going ahead with the purchase. Therefore, professional assistance is strongly advised on the part of the buyer.

The difference between new-build and resale properties

You should also be aware of some major differences between buying a newly built property from a contractor and buying a resale property from a private individual.

For example, when buying an apartment in a newly built residential project, usually the best apartments are being sold for the best price during the early stages of the building process, when the actual apartments are virtually nonexistent. Thus, often the buyer must rely on graphical illustrations and plans presented by the contractor. Obviously, this requires a critical approach and professional assistance on the part of a cautious buyer.

While Israeli law provides considerable protection to those who are interested in buying a newly built property from a contractor, not everyone is aware of their existing legal rights.

When receiving the keys to a freshly built and painted property, often you won’t be able to detect its true state until several months of intense use, during which you may often find some defects. Although Israeli law stipulates that the buyer has one year to present a list of defects which the contractor is then required to correct, often it works to the detriment of the buyer.

Knowing that the buyer will usually come by with a list of defects by the end of the first year, many contractors do not bother to repair minor defects as they are being discovered during the year, but rather postpone the repairs until the end of the first year, to make all the repairs in one concentrated effort.

On the other hand, when buying a “second hand” apartment you do not get you any guarantee as to the state of the property, however since the property was in prior use by the previous owner, usually it is possible to better assess the actual state of the property, especially when hiring a proper specialist to do the assessment work.

Another major difference between buying a newly built property and a used property arises from the fact that new buildings are not yet registered as such in the land registry. This process might normally take up to a couple of years. In the meantime, the buyer must rely on the contractor’s attorney to duly register the transaction in his private registry, until the whole building will be registered in the state registry, and only then will the buyer’s property rights be registered in the state registry.

Of course, these are just some examples of specific peculiarities of the Israeli real estate market which you should be aware of while looking for a residential property in Israel. Many other major and minor issues can be addressed when buying property in Israel if you have a reliable and experienced attorney on your side.

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Property Purchase

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1Who is this Service for?

Buying property abroad is a very popular activity but can be fraught with dangers.

Given that the purchase of a property is one of the most important investments that most people will make in their lifetime, it is crucial to be advised by an independent expert.

2What does this service consist of?

  • Review of the purchase contract.
  • Management of negotiations and counter-offers.
  • Verification that the seller is able to pass good title.
  • Registry search to ensure property free of any charges or other mortgages.
  • Ensure outstanding taxes on the property are up-to-date before transfer.
  • Make sure that all items included in the sale (fixtures and fittings etc.).
  • Attendance and assistance when signing the deeds of the property.
  • Management of negotiations and counter-offers
  • In depth information about schools, sports clubs, shops, cultural organisations, etc.
  • Payment of stamp duty.
Support services

3Free Support Services Included

When combined with the free and innovative Advocate Abroad support services you can be sure that you are obtaining completely transparent legal services from registered and regulated English-speaking lawyers abroad.These support services include:

  • Verification of the regulatory status of your professional.
  • Fees as recommended by the Local Professional Body
  • Fees specified in advance and legally guaranteed.
  • Service levels agreed in advance and guaranteed.
  • All professionals must hold professional indemnity insurance.
  • Professionals' proficiency in English monitored.
  • Continuous quality controls and reviews.

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