How to Buy Real Estate in Israel

Frequently Asked Questions About Buying Land in Israel

Are all lands in Israel owned by the gov't?

-Most, but not all. 80% is government owned, and 13% is owned by Keren Kayemet L’Yisrael (KKL-Jewish National Fund).
-7% of the land in the State of Israel is private land, referred to as ‘Tabu’ land. We specialize in this type of land. When you buy land in Israel privately, you are in fact really buying land in Israel.

What are the taxes when purchasing land in Israel?

-There is a purchase tax called ‘Mas Rechisha’ that is universally 6%. Please note, for many years it was 5%. When Yair Lapid became finance minister in 2013 he raised the tax from 5% to 6%, and this is where it remains until today.

-In some cases there is also VAT (Value Added Tax) on land purchases. This is in a minority of cases, when a business or a farmer sells his land. If an Israeli business purchases this land, it can apply for the VAT to be refunded.
In the case of an individual purchasing with VAT, there is generally no refund.
In addition, one must take into account that the tax is levied as follows: First the VAT 17% and then the purchase tax; 6% on the sub total. In reality, if you are purchasing with VAT, your total purchase tax is closer to 24%
*Note: We try to find land parcels without VAT and in the rare case where it will be levied, we consider only very good deals.
*Note: Our attorney often puts a clause into the purchase contract that there doesn’t appear to be VAT in the transaction, but should it occur, the seller will be responsible for payment.

What are the benefits of private (Tabu) land versus Minhal Karkain (Land Authority, Gov't land)?

-Private land is usually less expensive in taxes for building new structures and much less bureaucracy.
-Private lands are easier to apply in cases of rezoning.
-Private lands are registered in your name, forever.
-Planning is usually more flexible for private lands.
-Gov’t owned lands technically belong to the State and you are leasing long term.
-Private lands can be purchased from one purchaser up to an indefinite amount. In other words, you can have partners in the ownership of a parcel, should you choose to do so.

What are the purchase taxes on homes and apartments in Israel?

-For Israeli citizens residing in Israel there is no purchase tax up to a purchase of NIS 1,500,000 (shekels), if this purchase is the purchaser’s only home. For multiple homes Israelis also pay progressive purchase taxes on homes and apartments.
-For Israeli citizens residing outside of Israel, they are subject to the same purchase taxes as foreign citizens.
-Foreign citizens pay progressive amounts of purchase tax on homes and apartments beginning at 8% and rising to12%.

What are the minimum down payments to acquire a mortgage in Israel?

-For Israeli citizens living in Israel and abroad who own no other home in Israel: A minimum deposit of 25% is required.
-For Israeli citizens purchasing a 2nd or 3rd home, a minimum deposit of 50% is required.
-For foreign purchasers: a minimum deposit of 50% is required.

Can I build or put a home on agricultural property?

-In general, no. Some people try putting caravans with wheels and Yurts (a type of livable tent), but that is a legal gray area.
-Some agriculturally zoned lands may qualify for a change in zoning (rezoning) otherwise known as ‘Shinui Ya’ud’. This is case by case and must be considered only after consultation with an attorney who specializes in this field.

Are there municipal property taxes (Arnona) on building lands that are not built on or under construction?

-In most such cases there are no municipal property taxes. In rare cases when there are municipal taxes, the rates are very insignificant.

Are there municipal property taxes on agricultural land?

-There are, but they are very insignificant. For example, we pay about 55 shekels per year, per dunam for our customer land owners in Rosh Pina.

Galilee Agriculture: The Cheap Lands in Israel
Why is Galilee agricultural land considered cheap?

1) No private land in Israel is cheap.
2) Relative to housing land in the Galilee, the agricultural land is cheap.
3) Relative to the Center of the country, Galilee land in general is much cheaper. For private land, Galilee land is the cheapest in Israel, and Galilee real estate overall is the cheapest in Israel (housing).

Contact us to get more details about agriculture Land

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