Israel Real Estate
When buying or selling a real estate in israel, the price must be taken into account when making the deal. Not only is there the price which you will be paying or receiving, there are a number of other costs which may arise bit expected and unexpected.
In Israel, there is a purchase tax – this is paid by the buyer and is between 3.5 and 5% of the price of the property. Residents of the country pay one half percent less if this is the only property that they own.
If there is a couple where one already owns a piece of property, one partner will have to pay the higher purchase tax rate. If a property transaction takes place between family members, then the purchase tax is assessed at only one third the standard rate.
A sales tax is also assessed on property sales in Israel. The seller has to pay this tax, which is either 2.5% of the purchase price of the property, or .08% of the purchase price in the case of residential properties being sold by contractors. This tax is often not charged if the seller is an individual instead of a corporate entity.
Israel Real estate agents will also have to be paid a commission from both buyer and seller. A skilled real estate agent, however, can save you far more money on the sale than you will need to pay them in fees. Their knowledge of the market and applicable laws can be a real money saver. The broker’s fee is usually around 2% of the purchase price, payable upon sale. In the case of a lease, there is a VAT of one month’s rent which will need to be paid along with the VAT (17%). This commission must be paid at the time of signing the lease or sale agreement.
A real estate lawyer will charge a fee of 1.5% (plus the VAT) when buying a property from a contractor. This fee is to pay the fees of the contractor’s lawyer. When buying a property not at first hand, the lawyer will charge between .5% and 1% plus VAT.
A property inspection engineer (who you may want to bring in to have a look at the property especially if it is a used property) will charge between $400-$500 USD on average; though this may be a little more or less depending on the property’s size.
When purchasing a property in Israel the payments are usually made in Israeli Shekels (NIS) and not in Dollars, Euros, etc. When converting money to Shekels, the bank usually charges a fee: between 0.1% and 0.5% of the amount that is being converted.
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