Your Comprehensive Guide to Purchasing a Home in Israel

Purchasing a home in Israel is a significant and exciting endeavor, whether you’re investing, relocating, or seeking a new beginning. To ensure a smooth and informed process, it’s essential to understand the necessary steps and considerations involved. Here’s a detailed guide to help you navigate the home-buying journey in Israel.

1. Assess Your Financial Situation

Before embarking on your property search, evaluate your financial standing:

Down Payment: Typically, a down payment ranges from 20% to 30% of the property’s value.  

Additional Costs: Budget for additional expenses such as purchase tax (Mas Rechisha), legal fees, agent commissions, and potential renovation costs.

Mortgage Pre-Approval: Obtain a mortgage pre-approval (Ishur Ekroni) from an Israeli bank to determine your borrowing capacity and strengthen your position when making offers.

2. Engage Professionals

Surround yourself with experienced professionals to guide you through the process:

Real Estate Agent: A local agent can help identify suitable properties, negotiate terms, and provide insights into the market.

Real Estate Lawyer: Hire a lawyer specializing in Israeli real estate law to review contracts, conduct due diligence, and ensure legal compliance.

Appraiser and Inspector: Engage a licensed appraiser to assess the property’s value and a professional inspector to evaluate its condition.  

3. Conduct Thorough Due Diligence

Before finalizing any agreements, ensure the property is legally sound:

Ownership Verification: Confirm the seller’s ownership through the Land Registry (Tabu) and check for any liens or encumbrances.  

Legal Status of Property: Verify that all renovations and additions have the necessary permits and comply with zoning laws.  

Municipal Debts: Ensure there are no outstanding municipal taxes (Arnona) or other debts associated with the property.  

4. Make an Offer and Sign a Purchase Agreement

Once you’ve identified the right property:

Offer: Submit a formal offer to the seller, often with the assistance of your real estate agent. 

Purchase Agreement: Upon acceptance, your lawyer will draft or review the purchase agreement, ensuring it aligns with Israeli property laws and protects your interests.  

Deposit: A deposit, typically 5%–10% of the purchase price, is usually paid upon signing the agreement.  

5. Register the Property

After completing the purchase:

Land Registration: Register the property in your name at the Land Registry (Tabu) to formalize ownership.

Caveat: Consider filing a cautionary note (He’arat Azhara) to protect your interest in the property.

6. Settle Financial Obligations

Ensure all financial aspects are addressed:

Purchase Tax (Mas Rechisha): Pay the applicable purchase tax within 60 days of signing the agreement. Rates vary based on your residency status and the property’s value.  

Final Payment: Transfer the remaining balance to the seller as per the terms of the purchase agreement.

7. Transfer Utilities and Finalize Details

Before moving in:

Utilities: Transfer accounts for electricity, water, gas, and municipal taxes (Arnona) into your name. 

Renovations: If applicable, initiate any planned renovations or improvements. 

Move-In: Coordinate your move-in date and ensure all necessary arrangements are in place.