For the majority of immigrants, the question of how to buy real estate in Israel is of particular relevance. First, having your own home in your new country of residence will help solve many social and domestic problems. Secondly, the continuous immigration flow to Israel maintains a constant demand and high prices for real estate, which turns the purchase of a home or commercial space into a profitable investment. In addition, tax breaks are provided for new immigrants, which makes the purchase profitable.
The state of the real estate market in Israel
The Israeli real estate market has become the largest sector of the country's economy and has shown strong growth over the past 30 years. The development of the real estate market is greatly influenced by the fact that all land in the country is divided into two sectors: private (10% of the total volume of land) and state.
Real estate transactions on private land are not subject to any restrictions, including foreigners can freely acquire them. In the purchase and sale of housing on state land, including privatized land, there are the following features:
- the land is transferred on a long-term lease (usually for 49 years, maximum - up to 99);
- transactions can only be made by citizens of the country and persons entitled to repatriation;
- for the purchase of land or a separate building, a permit from the Land Office is required;
- buying an apartment in Israel on privatized state land involves the automatic extension of the lease;
- the purchase of real estate on non-privatized state land involves the payment of an annual rent to the state and the right of the state not to extend the lease after its expiration.
Among the main trends in the development of the Israeli real estate market should be highlighted:
- high real estate prices and their stable growth - every year it is more and more difficult to buy cheap housing in Israel. Only in the last 10 years, the price increase, depending on the region, has been from 100 to 300%;
- clear tax regulation;
- favorable mortgage policy;
- benefits for repatriates;
- a sharp excess of demand over supply;
- a wide range of real estate offers;
- high range of prices and their dependence on the regions;
- low development rates;
- a large number of foreign buyers of "spare" housing, which may not be used for years.
Emigrants from the Russian Federation will not be able to buy an apartment in Israel inexpensively in rubles. Firstly, real estate here is expensive, and secondly, you will have to pay only in shekels, at the current exchange rate.
Interesting fact. The Israeli government, in the context of a housing shortage, tried to reduce the number of vacant apartments by introducing a tax on the ownership of a third or more property in the amount of 1% of the cost (but not more than 18 thousand shekels). This tax was abolished in 2021.
Offers of the Israeli real estate market
The real estate market in Israel is diverse and is ready to offer each buyer a large selection of properties in both the primary and secondary sectors. 48% of all transactions are in economy class housing, 42% in commercial real estate and 10% in luxury housing.
The most popular among the residential segment are:
- city apartments of 3-4 rooms. One- and two-room options in Israel are not in demand;
- detached houses made of natural wood;
- suburban townhouses;
- villas;
- small country cottages - Zimmers, in the north of Israel.
More than 90% of all transactions in the country are in Tel Aviv, Herzliya Petuach, Jerusalem and Netanya. In big cities, there is a constant demand for offices. Large premises during the construction phase have the greatest investment attractiveness.
Prices for apartments in Israel by city vary greatly and depend on a number of factors - region, area of the city, layout, year of construction, proximity to the sea, etc.
Buying a pre-1980 secondary home in Israel can even bring a good profit (up to 50% of the cost of an apartment). This will happen if the house is subject to renovation: then each of its residents will receive a larger and more expensive apartment.
Housing prices in different cities of Israel
The cost of an apartment in Israel in US dollars largely depends on the region, city and even area of the city the property is located in. The most affordable housing is in small villages in the north and south of the country. For example, in Tiberias you can buy a 2-room apartment for 100 thousand dollars. USA.
At the other extreme are the prestigious areas of Tel Aviv, as well as the resort areas of the Mediterranean coast: apartments will cost no less than 400-500 thousand. Among the main reasons why expensive housing in Israel is the constant demand for it due to the steady increase in the population (in 2021, the increase was 140 thousand people) and the high cost of living in the country as a whole.
Tel Aviv is the leader in residential property prices
The average cost of an apartment in Tel Aviv is constantly growing. Expensive and elite apartments - in North Tel Aviv (one of the most prestigious neighborhoods - Ramat Aviv) and Floran. These are the quietest and safest areas of the city.
Cheaper housing is available in the Neve Shaanan, Ha Tikva and Shapiro districts, but it should be borne in mind that these are the most dangerous places to live in the city.
Average house prices in Tel Aviv (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 9 000-11 000 | 476000 | 677000 | 955000 | from 2 900 000 |
How much an apartment in Tel Aviv costs can be influenced not only by the location or footage, but also by factors such as the presence of a view of the sea coast, proximity to the university.
Property prices in Haifa
Haifa is the third largest city in Israel, located in the north of the country. The most elite and expensive housing can be found in the sleeping areas of the upper city - Carmel Tsarfati, Akhuza and others.
You can buy an apartment in Haifa from an owner in a good area and at a relatively affordable price in Neve Chenaan. In the lower town, more favorable places for living are Bat-Galim, Shprintsak.
The areas of Khalisa and Tel Amal are also notable for low prices, but they are home to many Ethiopian returnees. Selling an apartment in new buildings in Haifa from a developer is a rather advantageous offer that allows you to choose the right option.
Average house prices in Haifa (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 3000-5500 | 180000 | 255000 | 365000 | 1800000 |
Housing prices in other Israeli cities
One of the most demanded cities is Jerusalem.
Buying property in Jerusalem at an affordable price is quite problematic. This city has always been a center of attraction for adherents of three religions, and after the official transfer of the capital of the state to Jerusalem, prices became even higher.
The most popular districts located closer to the city center are Beit-a-Kerem, Rehavia, Talbiya (here are the most expensive apartments). More affordable prices in secular areas - Yamin Moshe, Nyot, Ramat Denia, Givat Masua, Arnona. It is relatively inexpensive to buy an apartment in the suburbs (for example, Maale Adumim).
Average house prices in Jerusalem (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 6 500-10 000 | 380000 | 492000 | 700000 | 2500000 |
The location of Ashdod on the sea coast contributes to the fact that many people want to buy real estate here. Buying a house in Ashdod will cost from 700 thousand US dollars on average.
Average house prices in Ashdod (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 4000 | 217000 | 308000 | 434000 | 2000000 |
You can buy a house in Israel by the sea in Ashkelon, which is also located on the Mediterranean coast.A serious disadvantage of this option is its proximity to the Gaza Strip, which, however, is also reflected in more affordable housing prices.
So, a house with five rooms can easily be bought here for 400 thousand US dollars.
Average house prices in Ashkelon (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 3000 | 167000 | 237000 | 332000 | 900000 |
In safe areas, for example in Eilat, the southernmost city of the country, located on the Red Sea, construction is actively developing, and real estate prices compete with areas of Central Israel - 400 thousand US for 3-room apartments, 700 thousand for a house.
The resort town of Netanya is very popular not only among repatriates. More affordable housing - in Ir Yamim, NAT-600, Kiryat Nordau, more expensive - in Ramat Poleg, Kiryat Hasharon, Ain Hatchelet.
Average house prices in Netanya (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 4700 | 256000 | 362000 | 511000 | 1200000 |
The cost of residential real estate in a number of small towns in Central Israel is almost the same: 5-6 thousand US dollars per sq. M. m. At this price, you can buy an apartment in Ramat Gan or buy an apartment in Bat Yam. So, for example, comparing the prices of settlements in the vicinity of Tel Aviv, you can see approximately the same picture:
Average house prices in Bat Yam (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 5250 | 275510 | 393211 | 553705 | 1500000 |
Average house prices in Holon (in USD):
| Price for 1 sq. m | Apartments | Elite housing (penthouse / villa) | ||
|---|---|---|---|---|
| 2 rooms | 3 rooms | 4 rooms | ||
| 5177 | 278190 | 395886 | 556380 | 1450000 |
Popular Israeli websites for buying real estate
Israel is an advanced country of high technologies. Here, like nowhere else in the world, a system of Internet resources dealing with real estate issues is developed, which make it possible to search around the clock.
For Russian immigrants, Russian-language Israeli real estate sites are of greater interest:
- yad2rus.co.il - the largest Russian-language resource, which has tens of thousands of private advertisements for the sale of both primary and secondary housing;
- doska.orbita.co.il - many private ads for the sale and rental of real estate;
- onmap.co.il - a wide selection of new buildings and secondary housing;
- israhouse.ru - advertisements for the sale, lease of residential and commercial stock, including new buildings.
Among the Israeli sites in which primary and secondary real estate funds are widely represented, the most popular are:
- winwin.co.il;
- homeless.co.il;
- landtax.co.il;
- baboo.co.il and other Hebrew sites.
There are also websites in Russia where you can find information on Israeli real estate:
- prian.ru/israel/
- tranio.ru/israel/
- israelsale.ru/.
Buying real estate in Israel: step by step instructions
The purchase and sale process includes several stages and corresponds to accepted world practice.
The first stage is preparatory. This is the search for an apartment or house, negotiations with the owner, collection of information about housing, neighbors, bargaining.
After the object has been selected and the price has been agreed upon, the standard purchase procedure begins, which is the same for both Israeli citizens and foreigners. Some differences are due to the fact that the buyer wants to buy a second home in Israel or purchase it directly from the developer.
When buying from a developer, after choosing a company and signing an application for real estate, the buyer must:
- pay the initial payment - 1-5% of the transaction amount;
- agree on the terms of the contract with the developer and sign it;
- pay a fee of 10-15% of the price specified in the contract;
- approve a payment schedule or pay 80% of the amount within 60 days after signing the contract;
- pay taxes on your purchase.
There are four steps to follow when buying a second home.
Step 1. Reservation and verification of residential real estate
If you can do without a realtor, then without the help of a lawyer, the purchase and sale of second-hand apartments in Israel will become impossible. It is the lawyer who will be able to check the legal purity of the transaction (for the presence of loan debts, arrests, ownership of the land) and prepare all the official papers.
It takes time to check, so the apartment must be reserved: sign “zikhron dvorim” - a preliminary contract. A deposit is required for the reservation - from 1 to 10% of the transaction amount. Force majeure situations should be clearly stated in the document in order to incur minimal damage in case of termination of the transaction.
Step 2. Sales and purchase agreement
The main contract is signed by the owner and the buyer in the presence of a lawyer or attorneys. Such a document is not certified by a notary. The contract should stipulate in detail all the main legal positions:
- information about the participants in the transaction;
- description of housing;
- price, method and terms of payment of money;
- the procedure for transferring ownership of real estate;
- loan repayment mechanism (when buying in installments);
- punishment for breaking the deal and other aspects.
The parties also fill out an application form at the TABU (Real Estate Registration Bureau) to prevent other transactions with the property until the completion of the transaction; this is especially important for mortgage lending.
After the conclusion of the contract in Israel, it is customary to pay from 10 to 30% of the agreed amount.
Step 3. Payment for the transaction
Payment is possible exclusively in Israeli shekels through a bank, according to the terms prescribed in the main sales contract. You can pay through the buyer's bank account with an Israeli bank or through a trust account opened by a lawyer. In this case, the buyer must transfer the amount of the transaction to the lawyer's account, which will be received by the seller after he fulfills all the conditions.
From 01.01. 2021 you can pay up to 10% of the amount in cash, but not more than 11 thousand shekels.
Step 4. Legalization of property rights
After the seller has received full payment for the property, the keys to the apartment are handed over to the buyer, who already has the right to use the property. The transaction will be completed only after the registration of the new owner and receipt of an extract from the register.
The registration should be handled by a lawyer who, upon completion, receives his main fee. From 01.01. 2021 buyers, in order to register a home in their name in the TABU, must, within 6 months after the date of the transaction, submit to the Tax Office a declaration on the source of funds for paying for the apartment.
Additional costs for buying real estate in Israel
In addition to the agreed price, the buyer will have to incur additional costs. These include:
- fees. The purchase and sale procedure is not complete without the services of professionals. These are primarily lawyers and realtors. You must pay for their services. Fees are on average 1.5-2% of the transaction amount + VAT (15.5% of the fee);
- government fees and charges - checking the registration of the seller (from 20 to 40 US dollars), filing an application with the TABOO (from 60 to 70 US dollars), for registration in the cadastre (from 20 to 40 US dollars);
- currency exchange - payment of commissions to the bank;
- for a mortgage - lending fee, property appraisal, insurance - 0.5% of the transaction amount.
Israeli property taxes
Every owner of Israeli real estate, before getting an apartment in Israel, must pay taxes, the amount of which is regulated by tax legislation. First of all, it is “mas rehisha” or purchase tax.
After the transaction is completed, it is necessary to pay "arnon" or the municipal tax, the amount of which is determined by a specific city council by its decision.
Real estate purchase taxes
The size of the "mas rehish" depends on the purchase price, the type of real estate, and the ownership of other objects. The basis for its calculation is calculated for each year (you can find the updated data on the website of the Israel Tax Office.
So, an Israeli citizen must pay tax on the purchase of a first home:
| Object price, shekels | Tax rate,% | Tax amount (shekels) |
|---|---|---|
| Up to 1 664 520 | 0 | 0 |
| 1 664 520 — 1 974 335 | 3.5 | 10574.9 |
| 1 974 335 — 5 093 535 | 5 | 162674.15 |
| 5 093 535 — 16 978 450 | 8 | 1089930.55 |
| over 16 978 450 | 10 |
When purchasing a second apartment and subsequent real estate objects, the tax rates for Israeli citizens will be:
| Object price, shekels | Tax rate |
|---|---|
| up to 5 095 570 | 0.08 |
| over 5,095,570 | 0.1 |
Mas Rehisha tax must be paid no later than 60 days after the conclusion of the transaction.
Tax incentives when buying real estate
Israeli legislation provides certain benefits to such categories of the population as new repatriates, victims of terror, disabled / visually impaired, relatives of soldiers killed in the service. Thus, the poor can count on free housing in Israel.
The specified categories of persons (except for repatriates) when buying a single home are exempt from tax when the cost of an apartment is up to 1,664,520 shekels, if it is exceeded at least by shekel, they must pay 0.5%.
New repatriates when buying an apartment within 7 years after repatriation (it does not matter, the first or additional) must pay tax:
- 0.5% - for a value of up to 1 700 605 shekels;
- 5% - over the indicated cost.
The expediency of using this privilege by repatriates raises certain doubts: in most cases, it is easier to declare a transaction as the purchase of a single apartment at a zero tax rate. If we are talking about the acquisition of very expensive apartments or a mansion, then the benefit is obvious.
Property ownership and taxes
The new owner of real estate, in addition to the purchase tax and maintenance costs, must pay a number of other taxes. Of these, the main one is “arnona” or municipal tax. You can pay it in installments - two months each, or in whole for a year.
All property owners know what “arnona” is in Israel, but not everyone understands how this fee is charged. The calculation procedure is causing heated controversy in the country. In every city “arnona” is different.
So, the size of the fee is influenced by the area of the apartment. In some cities, such an area is measured as "net-net" - the net area of rooms without partitions, "net" - the same, but including internal partitions, in others - as "gross-gross": the measurement is taken from the external walls, the area of balconies is added , landings, parking lots. Most often in Israel, the latter principle of accrual is applied.
The national average "arnona" can be from 200 to 400 US dollars for two months.
Some groups of the population are entitled to benefits - disabled people, orphans, new repatriates. Housing in Israel for repatriates is exempt from "arnona" by 90% for 12 months. They can exercise this right during the first two years of their stay in the country.
Buying residential real estate and mortgages
Mortgages in Israel are readily available. Foreigners also have the opportunity to use it, but on more stringent conditions. The most common: "mashkanta" or targeted mortgage for the purchase / construction of new housing, a loan from the state and mortgages from commercial banks.
State-funded targeted mortgage or "mashkanta" in Israel is the most popular type of mortgage for buying a home from a developer. It makes it possible to cover up to 60% of the required amount with a credit rate of 3-4%. The object of purchase and sale acts as a pledge. The maximum loan term is 30 years.
You can buy secondary housing in Israel using a government loan. However, the sale and purchase should be carried out in areas specially designated by the government with little developed infrastructure.
Commercial mortgages allow you to purchase private houses in Israel, housing from the primary and secondary stock; they are not funded by the government, they are provided by private banks in Israel.
Residential real estate for rent in Israel
Those who do not have access to social housing in Israel, who do not want to stand in line for ten years at the Ministry of Absorption and do not have the means to buy their own apartment, have a chance to rent housing.
A characteristic feature of the Israeli real estate market is the absence of large companies or apartment buildings among landlords. Individuals or small firms predominate, whose activities are primarily aimed at serving tourists for a period from several days to a month.
Renting housing in Israel for a longer period is also possible: for a year, less often for six months. Prices are usually tied to the consumer price index, which tends to rise: daily rent - from 50 to 100 dollars. USA, long-term lease - 1-3 thousand US per month.
Rental prices are higher in Tel Aviv, Jerusalem, resort centers. On the periphery - Zichron Yaakov or Kiryat Gate - the pricing policy is more democratic.
An agreement is concluded between the landlord and the tenant for the lease term. It must specify the price, terms of rent and payment, the possibility of termination or renewal.
Let's summarize
Israeli laws provide repatriates with the right to freely buy residential and non-residential real estate and make a purchase for an individual. It should be borne in mind that the high cost in the country and the constant demand for housing contribute to the rise in property prices.
The first rule when buying a home and making a deal in Israel is to find a qualified lawyer. You can search for a house or apartment with the help of professional realtors or independently, especially if you speak Hebrew.
The buying procedure is straightforward and transparent. Payment - not in rubles, but in new shekels, via bank transfer. The buyer must pay the purchase tax and register the property in his name, after which he becomes the full owner of the home.
Buying a home in Israel imposes an obligation to pay taxes and payments related to real estate on time. New immigrants have the opportunity to take advantage of some tax breaks.
