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The Finer Details To Real Estate Investment In Israel


With so much of the focus on the financial and legal aspects of investing in Israel, the finer details can often get overlooked. In Israel, we do things a little differently and GPI, who are with you every step of the journey, can help you avoid some of the common errors foreign investors make when entering the market here.

The finer details;

Memorandum of Understanding

As a foreigner, a memorandum of understanding, often referred to as the intent of purchase, is used to prove an investors' intentions of purchase. A legally binding document, our advice to all clients is to have a trusted and dependable real estate attorney who will prepare all the necessary documents - not only for the actual purchase - but also those documents that will protect your interests until you do.

Tax Advice

Before signing any sales agreements concerning your future investment in real estate or any other part of the Israeli investment sector, be sure to consult a tax advisor for an up-to-date understanding of your tax obligations. The law is continually being amended and there are a number of tax and investment benefits open to foreign investors that can significantly change and improve the overall tax picture.

Don't Forget: Municipal Improvement Tax

This is a tax burden, enforced by the municipality that requires the seller or owner of a property to pay a tax on any (approved) works that have resulted in increasing the value of the property. This tax is calculated on the upgraded value alone and is settled either when the property is sold (calculated as a percentage of the difference between the owners purchase price and the selling price) or when improvements have been made to the property. Finding out the cost of the improvement tax is important because it can be used in the offer and divided up in such a way that the sellers tax can be reduced.


Don't Forget: Debts At The Property

On the completion of a sale your name is attributed to the property as listed at the Land Registry. However, before you can manage to get your name officially registered as the new owner - the seller will be required to prove that they have no outstanding debts owed to the municipality. In order to ensure the transaction is swift and doesn't encounter unnecessary bureaucratic delays, real estate lawyers can execute a search on the properties' debt status beforehand. Depending on where you are in the process - a portion of the sales proceeds can be held by the lawyer until confirmation has been received that the property is dept free.


The Mortgage: The First Page

If you are applying for a mortgage, be sure to get this done before signing a contract of sale. In Israel, the contract of sale is the very last step in purchasing a property and marks a legal commitment to making the payment. If you do not receive the mortgage in time, or you receive less funds than you anticipated or anything else jeopardizes the commitment you made in signing the contract of sale - you will be in breach of contract and incur penalties.


A Real Estate Lawyer: The Third Page

Unlike other countries, an Israeli real estate agent cannot issue a sale contract, which is just one of many aspects of the purchasing process you will need a lawyer for. In addition to knowing the law and its loopholes, conducting the relevant searches that could affect the price and timeline, your real estate lawyer can also sign documents on your behalf, if you are located abroad or otherwise.


What's the Second Page?

More than a real estate business, we like to think of ourselves as the second page. Once you have your funding secured (and even before that) we are the experts not only pairing clients with the right investment opportunity, in the right area at the right price, but we are with you every step of the way, from helping you find the right lawyer, navigating the bureaucracy, translating the small print, to booking your shippers.

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