Buying a house in Israel is a big achievement for many. Before investing in any house, you have to research to identify the right property that suits your needs. It is also important to understand how Israel’s real estate market works and the rules put in place. This guide will take you through the process of purchasing a property in Israel.
Can Foreigners Acquire Houses in Israel?
Israel is a friendly country to foreigners. Therefore, whether you’re British or American, you can buy a house in Israel. However, the taxes imposed favor Israeli citizens more. While Israeli residents are required to pay 5% to 8% of the property value, foreigners pay 9%-11%.
Where Do You Buy House in Israel, and What Are the Prices?
Deciding where you want to live in Israel is the first step when looking for a house. Note that the houses are priced depending on their locations. Properties in major cities like Tel Aviv and Jerusalem tend to be very expensive. That’s because they are situated near essential amenities like schools, modern hospitals, restaurants, and supermarkets.
The farther a house is from these big cities, the less it will cost. Most Israelis look for houses located in areas far from major cities but have the potential to grow.
The average cost of buying a house in a big city is 30,000 Shekels per square meter, while it costs 24,000 Shekels outside the cities.
If you are a foreigner, we recommend you consider looking for a house in an area with a good number of immigrants. If you’re a Jew, it’s advisable to settle in an area that has people you share religious beliefs.
You now understand the average cost of buying a house and the taxes involved. So, it is time to begin the process of buying property. Follow these simple steps:
1. Consider Your Budget
Israel is a great place to live in. However, if you want city life, bear in mind that the units in major cities are not cheap. Therefore, when selecting a location, check the prices of the houses in that area to determine if they are within your budget. It is also important to know whether monthly expenses make financial sense to you.
2. Search for Your Perfect House
There are several websites that list houses in Israel. You can decide to do the house hunt on your own or hire real estate agents to do it on your behalf.
3. Consider Taking a Mortgage
In the event your budget is insufficient to buy a house, you can consider applying for a mortgage. Foreigners can also access asset financing, usually 50% of the value of the property. We advise you to hire a mortgage broker to negotiate the terms of your mortgage on your behalf.
After identifying your ideal home and negotiating payment with the owner, here is what you should do:
1. Hire a Real Estate Lawyer
You need a qualified real estate lawyer to help you get into a contract with the house owner.
2. Understand the Payment Schedule
Read carefully and understand the payment schedule before signing the contract.
3. Sign the Contract
If the terms of the deal are favorable, you can sign the agreement and then make the initial payment.
Finalizing Your Mortgage
You now have the contract documents that banks require to process mortgages. Therefore, you can submit them to the bank so the remaining balance can be channeled to the house owner.
Tax Payment and Registration
As mentioned earlier, there are taxes to be paid when buying a house in Israel. Your lawyer will guide you on this. They will also take care of the house registration and ownership transfer. Once these processes are completed, you become a house owner in Israel.
Buying a house in Israel appears to be an intimidating process. But with the right professionals like real estate lawyers and agents, you can become a house owner within the shortest time possible.