| Your Real Estate Expenses Guide For Buying A Home In Israel |
This
guide will walk you through the various expenses associated with a real
estate transaction in Israel. Whether you are looking to buy or sell a
property in Israel, it will help you plan ahead and make sure you are
on top of the game. It is built in a Q&A format for your
convenience.
What Is the Purchase Tax?Purchase tax is payable by the purchaser in a real estate transaction. Generally, the tax is between 3.5% and 5%, depending on the property value. A reduced tax of 0.5% is payable by an Israeli resident that is purchasing a residential apartment, if it is the only flat he owns. On real estate sales between close members of a family when no money changes hands, purchase tax is 1/3 of the normal rate of tax.From the point of view of Israeli income tax, a wife with children under 18 are considered a single family unit, and therefore if the wife owns a property in her own name and the husband purchases a second property in his name, he will pay a higher tax rate as if he already owns a property. What Is the Sales Tax?Sales tax was introduced on 1.1.2000 and it applies to the seller. The tax is 2.5% of the value of the sale or 0.8% on the sale of a residential property by a building contractor. The sale of a property by a private individual is exempt from sales tax in many cases.What is the commission of the real estate agents/brokers in Israel?The commission in Israel is payable by each of the sides of the transaction (both seller and buyer). A good agent will save you more money than he costs, as he has a wealth of experience which will help you make the right decisions.The customary brokerage commission payable is:
What is the legal fee for the real estate lawyer?When buying a first-hand property from a contractor, you will have to pay 1.5% plus VAT to the contractor's lawyer for legal fees.In the case of second-hand purchase, you will pay between 0.5% and 1% plus VAT to the lawyer that will handle matters on your behalf. What are the property inspection fees?This is important especially when you are buying a used property. You should have the property inspected by a certified engineer or surveyor before signing the contract and make sure you have a written statement at hand. The average fee is approximately $400-$500 plus VAT but it may vary according to the size of the property.What are the currency conversion rates?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.Written by Shlomi Ben Ishai, owner and general manager of Nadlan-Plus, a top real estate Israel firm, specializing in Jerusalem real estate, offering luxury apartments in Jerusalem and a wide selection of properties across Israel. Providing unique services to the international community. Please feel free to republish this article provided this resource box remains together with working hyperlinks. |
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