Welcome to the latest issue of the Israel Real Estate Law Insights, published by
Nicole Levin Law Offices, experts in all aspects of real estate law in Israel.
You are receiving this newsletter because you signed up for it on our website or
because you filled out a form at a housing fair. Our newsletter focuses on the
legal aspects of buying, selling and renting property in Israel.
When purchasing a second hand apartment in Israel there are additional expenses beyond the purchase price:
- Legal fees. These may be anywhere between 0.5% - 2% of the price of the apartment, plus VAT (Value Added Tax - this is 16.5% of the fee). Lawyers usually charge 0.5 - 1% plus VAT, but fees may be higher if additional services are offered.
- Real Estate Agents Fees. It is customary for agents to charge 2% of the price plus VAT from each side. Before signing with an agent it is important to ascertain the fees and in which instances they are to be paid.
- Purchase tax. This is calculated on a sliding scale based on the price of the apartment. This scale is updated every 3 months. New immigrants are granted a partial exemption from purchase tax. Find out more about the purchase tax levels.
- Money Conversion Costs. Although prices are usually quoted in US dollars, payments are made in shekels. The banks in Israel charge commissions both for receiving foreign currency into an account and for converting the money to shekels....
Read the complete article on our website.
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Tip of the Month
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When purchasing an apartment in Israel, whether from a construction company or whether second hand, make your attorney explain to you the ins and outs of the linkage of the price to the dollar or the index. Just because the price was quoted to you in dollars does not mean that you send dollars and that is it. When the price is quoted in dollars you very often pay in shekels at the rate of exchange of the dollar on the day of the payment. Sometimes construction companies put a clause into their contracts stating that the rate of exchange cannot fall below a certain rate. Very often the price is quoted in dollars but then converted into shekels on the day of the signing and then linked to the index. Make sure you understand the provisions of your contract on this issue so that you can prepare yourself economically for the the payments you will be contractually bound to make.
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Legal Vocabulary
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'Mas Shevach' (Capital Gains Tax) –
This is a tax that sellers of real estate pay on profit from the sale of property. Under certain conditions, a seller of residential property can get an exemption from this tax. Before selling real estate, consult your real estate attorney as to whether you are entitled to the exemption and if not, how much the tax will come to.
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For Further Information
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