Israel (IL)
Start-Up Nation with world-class tech ecosystem, rich ancient history, stunning Mediterranean beaches, and a vibrant expat and immigrant community.
Buying Property in Israel
The full buying process, transaction costs, mortgage, and legal requirements.
Israel's property market is one of the most expensive in the world relative to local incomes. Tel Aviv is particularly extreme — average 4-room apartment prices exceed NIS 4–6 million. Foreign nationals can legally purchase Israeli property without restriction. The purchase process is handled primarily by lawyers (not notaries). The Land Registry (Tabu — לשכת רישום המקרקעין) is the definitive record of all property ownership and must be checked before any purchase. The Bank of Israel limits mortgage LTV to protect against market overheating.
Rent vs. Buy
Buying in Israel is extremely expensive — monthly mortgage payments often exceed NIS 10,000–20,000 for a Tel Aviv apartment. Renting is cheaper in the short term but offers no equity. The Israeli property market has historically risen strongly (10–20% annual gains in peak years) but is currently stabilizing post-2023 peak. For expats on temporary status (B1 visa), buying is usually impractical. Olim who intend to stay long-term may benefit significantly from property purchase, particularly given the purchase tax exemption on first home.
Buying Process — Step by Step
Property Search
2–8 weeksSearch on Yad2 (yad2.co.il), Madlan, or via real estate agents. Define your budget including all purchase costs (purchase tax, lawyer fees, agent fees). Get mortgage pre-approval (Ishshur Ekroni) from bank before making offers.
Engage a Lawyer
Before making any offerHire a licensed Israeli conveyancing lawyer (Orech Din) immediately — before signing anything. The lawyer will conduct due diligence, handle the purchase agreement, and manage all registrations. Cost: 0.5–1.5% of purchase price.
Due Diligence — Tabu Check
1–2 weeksLawyer obtains a Tabu extract (Nesach Tabu) from the Land Registry to verify: property ownership, existing mortgages (Mashkanta), liens (Shia'bud), and building rights. Also check for municipal violations (Hefarot) and building permits. This step is CRITICAL — never skip it.
Negotiate and Sign Letter of Intent (Zikhron Devarim)
During negotiationA letter of intent (Zikhron Devarim — זיכרון דברים) is sometimes signed by buyer and seller to agree key terms before the full contract. Be aware: a Zikhron Devarim can be legally binding in Israel — have your lawyer review before signing.
Sign Purchase Agreement (Hoze Mechira)
2–4 weeks after agreement on termsFull purchase agreement (Hoze Mechira — חוזה מכירה) signed by both parties in the presence of both lawyers. Agreement specifies: price, payment schedule, transfer date, title warranties, and penalty clauses.
Pay Purchase Tax (Mas Rechisha)
Within 60 days of contract signingPay Mas Rechisha (purchase tax) to the Israel Tax Authority within 60 days of signing. Amount varies significantly: Israeli residents buying first home have lower rates; investors and non-residents pay higher flat rates. Olim get significant purchase tax discounts on first property.
Arrange Mortgage (Mashkanta)
2–6 weeksFinalize mortgage with Israeli bank. Bank sends appraiser (Shama'i). Bank approves final mortgage based on property valuation. Mortgage insurance (Bituach Mashkanta — life and property) required.
Pay Remaining Balance and Transfer
30–120 days from contract signingFinal payment made on agreed transfer date. Keys handed over. Lawyer registers ownership transfer in Tabu. Process complete when your name appears on the Land Registry.
Transaction Costs
| Cost Item | Amount | Notes |
|---|---|---|
| Purchase Tax (Mas Rechisha) — first home, resident | 0% up to NIS 1,940,125; 3.5% NIS 1,940,126–2,295,955; 5% NIS 2,295,956–5,338,290; 8% NIS 5,338,291–17,794,305; 10% above (2026 — thresholds frozen from 2025; verify at taxes.gov.il) | Israeli residents buying their first home receive these preferential rates |
| Purchase Tax — investor / second home / foreign resident | 8% from first shekel up to NIS 6,055,070; 10% above | Much higher rates for non-residents and investors |
| Purchase Tax — Oleh (new immigrant) | 0.5% on first NIS 1,940,125; standard rates above (2026 thresholds) | Significant Oleh discount within 7 years of Aliyah |
| Lawyer Fee (Shkhirut Orech Din) | 0.5–1.5% of purchase price + VAT | Buyer and seller each pay their own lawyer |
| Real Estate Agent Fee (Dmei Tikhun) | 2% + VAT from buyer; 2% + VAT from seller | Negotiable; often can reduce to 1.5% |
| Property Appraisal (Shama'i) | NIS 800–2,500 | Required by mortgage bank |
| Land Registry Registration (Rashum Tabu) | NIS 200–500 | Registrar fees for ownership transfer registration |
| Mortgage Insurance (Bituach Mashkanta) | NIS 1,500–6,000/year | Life insurance + property insurance; required by bank |
| Betterment Levy (Heitz Hashbashu) | Up to 50% of land value increase | Paid by seller when building rights are granted. Buyer should verify no outstanding levy. |
The Notary — Mandatory for All Purchases
Israel does not have a civil notary system equivalent to European countries for property transactions. Lawyers (Orekhei Din) handle conveyancing instead. The lawyer drafts, reviews, and executes the purchase agreement and registers the transfer in Tabu. Both buyer and seller typically have their own lawyer. Some property transactions are also certified by a Notar (notary) for specific legal documents, but the conveyancing itself is lawyer-handled.
Mortgage
Israeli mortgages (Mashkanta — משכנתא) are regulated by the Bank of Israel. Interest rates are linked to the Bank of Israel prime rate (Rishit) or CPI (Madad). Mortgage products: variable rate (linked to prime or CPI), fixed-rate (Risheot Kevua), or combination tracks. Bank of Israel regulations limit risky loan-to-value ratios.
25% for first home (Bank of Israel limits LTV to 75%). 50% for investment property (LTV limited to 50%). Israeli banks require minimum 25% equity for first-home buyers.
Foreign residents and non-citizens can obtain Israeli mortgages but conditions are stricter: lower LTV ratios (often 50–60% max), higher interest rates, and more documentation required. Must prove income and employment stability. Israeli banks are conservative with non-resident borrowers. Consider engaging a mortgage broker (Yaatzan Mashkanta) who specializes in foreign buyer mortgages.
Land Registry
Tabu (לשכת רישום המקרקעין — Lishkat Rishhum HaMakarka'ot): the definitive public land registry of all Israeli property ownership. Records all titles, mortgages, liens, and encumbrances. Always verify Tabu before any property purchase or rental. Tabu extracts available at justice.gov.il for NIS 10–20. Some properties are registered with the Israel Lands Administration (Rashut Mekarka'ei Yisrael) rather than Tabu — your lawyer will advise.
Taxes
Purchase Tax (Mas Rechisha): paid by buyer, rates as above. Betterment Levy (Heitz HaHashbashu): paid by seller when building rights increase the property value — check that no outstanding levy affects the property you are buying. Capital Gains Tax on sale (Mas Shevach): 25% on gains (linear calculation to exclude pre-2014 gains). Israeli residents buying first home and long-term owner-occupiers may be exempt from capital gains on sale. Arnona (municipal tax): ongoing annual charge paid by occupier. Land tax (Mas Karka): annual 2.5% tax on undeveloped land held for speculation — promotes development.
New Build vs. Existing Property
New builds (Dira Mitilevet / Dira Chadasha): purchase from developer with all-inclusive price (including purchase tax pre-calculated), often with payment in stages during construction. Risk: developer delays or insolvency — use developer with bank guarantee (Aruvat Bank). Existing property: faster transfer, what you see is what you get, but check for hidden defects and municipal violations. New builds often in better structural condition with modern amenities.
Selling Property
Selling process mirrors buying. Seller engages lawyer. Buyer's due diligence conducted. Purchase agreement signed. Seller pays: capital gains tax (Mas Shevach — if applicable), agent fee (2% + VAT), and lawyer fee. Ensure all mortgages are discharged from Tabu before transfer. Tax clearance from Israel Tax Authority required for capital gains calculation.
Useful Links
Property Buying
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