Buying Property in Israel

Yes, foreigners can legally purchase property in Israel, regardless of citizenship or residency. However, ~93% of land is owned by the Israel Land Authority (ILA) and is leased on long-term contracts (often 49 or 99 years) rather than sold outright. Foreign buyers are generally limited to purchasing properties on privately owned land, but if the foreigner is Jewish/eligible for Aliyah according to the law of return, they can also buy ILA land. 

In addition to these limitations, foreign buyers must complete several extra procedural steps, including identity verification and submitting official documentation, often in Hebrew.

For more on evaluating leasehold versus full ownership, see our guide on acquiring rights in Israeli real estate for foreign citizens.

After signing the purchase agreement, the property must be registered with the Israel Land Registry (ILR), commonly referred to as the “Tabu,” which records ownership status, liens, mortgages, and any legal restrictions. Before proceeding, buyers must verify that the seller is the registered owner and that there are no outstanding debts or claims attached to the property.

Land in Israel falls into two main categories: 

1. Private land, which can be purchased outright
2. ILA land, which is leased for periods up to 99 years. 

The type of land affects the nature of your rights as a buyer. 

Registration involves several key documents, including the Tabu extract (land registry certificate), signed purchase agreement, and relevant tax receipts. These documents are often in Hebrew and may require certified translation. 

While real estate agents can assist with finding and negotiating property, only a licensed Israeli attorney can conduct the legal due diligence and complete the registration. Without legal representation, buyers risk costly errors and delays.

Buying property in Israel involves several legal, financial, and administrative steps. Here’s a step-by-step breakdown:

1. Property Search: Find a property through a real estate agent or listing site.
2. Hire a Lawyer and Conduct Due Diligence: Hire a licensed Israeli real estate lawyer who can review documents, verify the seller’s ownership rights, and advise on your obligations. For leasehold land, they will examine lease terms with the ILA.
3. Preliminary Agreement (Optional): Some transactions begin with a memorandum of understanding (Zichron Devarim), outlining basic terms. Always consult your lawyer before signing.
4. Sign Purchase Agreement: This formal contract sets the sale price, payment schedule, and legal terms. It must be drafted or reviewed by your lawyer and may require notarization and certified translation.
5. Tax Registration and Payment: The buyer must register the purchase with the Israeli Tax Authority and pay purchase tax (Mas Rechisha) within 60 days. 
6. Ownership Transfer and Final Registration: Once payments are complete and documents are in order, your lawyer will register the property in your name with the ILR.

The process typically takes 1–3 months, depending on complexity.

In addition to the purchase price, buying property in Israel includes several additional costs that buyers must plan for.

1. Purchase Tax (Mas Rechisha): A sliding scale tax based on the property’s price, with foreign buyers often paying higher rates than Israeli residents. Payment is due within 60 days of signing the purchase agreement. Some exemptions exist (e.g., new immigrants or first-time buyers), but rarely apply to non-residents.
2. Legal Fees: Generally around 0.5% and 1.5% of the property value, depending on the complexity of the transaction.
3. Agent Commissions: 2% of the purchase price, plus VAT.
4. Other costs: Land registry fees, notarization, certified translation, and foreign currency conversion.
   

All taxes must be paid in Israeli shekels (NIS), and foreign buyers should account for exchange rates and international wire fees when budgeting. For the most accurate breakdown of tax brackets, consult your lawyer or the Israeli Tax Authority directly

Foreigners can obtain a mortgage in Israel, although banks typically apply stricter criteria than they do for Israeli citizens. Most lenders offer non-residents a mortgage of up to 50% of the property’s value, depending on the buyer’s financial standing and the location of the property. Interest rates vary and may be higher than those offered to local buyers.

To apply, you’ll usually need proof of income (e.g., payslips or tax returns), recent bank statements, ID, proof of residence, and a professional appraisal by a bank-approved assessor.

Many banks require an in-person meeting to finalize the mortgage, and all documents must be in Hebrew or officially translated. If you’re abroad, appointing a power of attorney may be necessary.

Because the process can be complex, especially overseas, many buyers consult with a mortgage broker or trusted professional familiar with the Israeli lending system to help compare options and manage paperwork efficiently.

Israeli real estate law is complex, especially for foreign buyers unfamiliar with the legal landscape and Hebrew documentation. A lawyer is not just helpful but essential. They ensure the contract protects your interests, verify the property is properly registered and debt-free, and manage tax filings, fund transfers, and registration with the Tabu.

Many common mistakes stem from skipping this step, including:

1. Overpaying taxes due to a misunderstanding of brackets
2. Purchasing property not properly registered
3. Assuming short-term rentals are allowed without local approval
4. Signing untranslated documents
5. Overlooking liens or unclear leasehold terms

At Michael Decker & Co., we guide international clients through the process. From reviewing contracts to handling logistics with banks and registrars, we help ensure your transaction is secure and legally sound.

Article Co-written by: Maytal Chelst.