Buying property in Israel as a foreigner: rules, taxes and mortgage

Israel places no general restriction on foreigners buying an apartment. Every year, buyers from France, the United States, the United Kingdom and elsewhere purchase homes for family use, for a future aliyah or as an investment. A few things work differently when you are not an Israeli resident.

Purchase tax (mas rechisha)

A resident buying a single home pays a reduced purchase tax, with a first bracket at zero. Non-residents are taxed like buyers of an additional home: a flat rate on most of the price, with a higher rate above a high threshold. The brackets are updated every January, so ask your lawyer for the current figures before you make an offer.

New immigrants (olim) are entitled to a reduced rate on one apartment bought within a set period around their aliyah date. If you are planning aliyah, it is worth checking the timing before you sign.

Mortgage limits

• Israeli banks can finance up to 50% of the price for non-residents and investors.
• Your income abroad is accepted, but the bank will ask for full documentation and often a local account.
• Comparing several banks makes a real difference: a mortgage broker can do it for you.

Buying from abroad

• Power of attorney: you can sign through an Israeli lawyer, with a power of attorney signed before a notary or at a consulate.
• Checks before signing: your lawyer checks the Land Registry (Tabu) extract, liens, building permits and the seller’s identity.
• Payments: in a resale, the price is usually paid in instalments, with the last one at handover.

Where to start

Browse apartments for sale and new projects, compare prices by city, and contact the owner or the developer directly. On Yad le Yad there is no agent and no commission.

This article gives general information. Rates and rules change: have them confirmed by an Israeli lawyer before you commit.