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A guide to Purchasing an apartment in Israel

Congratulations on the decision to purchase property in Israel!
There are many things to consider when purchasing a home, as a courtesy we have outlined some guidelines on what to expect and important things to consider. Please note that these are only guidelines and the information is subject to change without notice. We strongly advise you to consult with legal professionals with an expertise in Real Estate Law before signing any documents. As always, we are here to be of aid and help you get into your dream home quickly and seamlessly.

Identifying your Neighborhood
• Visit the neighborhood both in the daytime and at night
• School district / parks / public transportation / medical facilities
• Local Shops / grocery / restaurants
• Proximity to religious and social centers
• Local inhabitants – religious affiliations / age demographics / family orientations / ethnicity / language

The Apartment
- Identify the following
• Budget
• Size / # of rooms / balcony / storage / parking
• Front or rear facing apartment
• Communal areas – elevator / rooftop / garden
• Sunlight / Noise levels – Visit the apartment several times at different hours of the day and night

• Come prepared – Do your homework!! Know the market and the neighborhood.
• Know how much your intended renovations will cost before coming to the negotiation table
• Know all your extra costs associated with the purchase (see below)
• Detail the list of what is included and/or attached to the property.
o i.e. storage room, parking spot and any large appliances
• Does the final purchase price include V.A.T? This is a considerable sum, as it is 17% of the total price.
• Know your bottom line, how much you are willing to pay and be ready to walk away

Costs to Consider
• Lawyer Fees – Runs roughly between 0.5% - 1.5% + V.A.T of the purchase price depending on the scope of work and legal responsibility.
• Real Estate Broker's Commission – customarily 2% + V.A.T of the purchase price
• Purchase Tax – Consult with your lawyer to clarify and calculate this. This tax is calculated on a progressive scale based on many variables, and was recently updated in 2013.
• Please visit for aid in a mortgage calculator (in Hebrew)
• Project Lawyer Fee for New Developments – 1% - 2% + V.A.T. This is only applicable to new developments and covers the registeration of the building as a condominium, including the plans which identifies each owner's property, rights & responsibilities and deed restrictions
• Currency conversion and associated bank fees and commissions
• Municipal Fees – Arnona – Reductions are available for New Olim, pensioners, students, single parents families and large families
• Vad Bayit means committee of the house. This committee collects money from each tenant to pay for communal area expenses such as doorman, gym facilities, swimming pools, cleaning of stairwells, elevator maintenance, and maintaining the grounds.

Legal questions to cover with your lawyer
• What is the legal status of the property?
• Are there any outstanding liens against the property?
• Have previous renovations been done with proper permitting?
• Find out about the zoning of close by lots or freestanding homes
• Make sure a note is added to the deed with the land registry stating your rights to the property
• Have your lawyer handle the registration of the apartment and transfer the property deed to your name

• Banks offer a mortgage of 50% - 70% of the property value. This will vary based on status in Israel, credit score, and whether this si a first time ownership. It is important to note, that banks also have the property appraised at roughly 5-10% less than the market value for the purpose of a quick resale.
• Be prepared to shop the mortgage around and negotiate the banks against each other
• Ishur Ekroni – this is a general mortgage approval from the bank which takes 3-10 days to approve. This is important for you discuss prior to help you define your budget limitations

Additional Useful Info
• 1sq.m = approx. 10sq.ft
• 1 dunam = approx. 1000 square meters = 0.22239 acres = approx. 9700 sq. ft.
• A secure/safe room – Mamad – This room is required by law since the 1991 Gulf War
• # rooms – a listed apartment will count the living room and bedrooms in total for the number of rooms