Is Israel's tax system a deterrent for real estate investors?

Real estate investors in Israel

A favorable environment

Investing in real estate in Israel can be an excellent opportunity for investors seeking high, stable returns over the long term. The Israeli real estate market is considered one of the strongest and most stable in the world, with housing price growth rates that have been consistent over the years.

In addition, the Israeli government encourages investment in real estate by offering tax incentives for foreign investors. Israeli laws also protect investors' rights and offer long-term legal stability.

Israel is also a fast-growing market with strong demand for housing, particularly in major cities such as Tel Aviv and Jerusalem. This means that investors can benefit from continued appreciation in property prices.

Finally, real estate in Israel is considered a safe investment with a low risk of capital loss. Investors can also benefit from high rental yields, as demand for rentals is strong due to the increasing number of young workers who prefer to rent rather than buy.

In short, investing in real estate in Israel can offer many opportunities for investors seeking to diversify their portfolios and achieve stable, high returns over the long term.

However, it's important to do your research and work with local real estate professionals to maximize the potential return on your investment.

In this article, we'll look at the various constraints for real estate investors in Israel.

Acquisition tax

To begin with, the acquisition tax is a hindrance for real estate investors in Israel.

The acquisition tax is calculated on the basis of the purchase price and ranges from 8% to 10% for investors.

It is calculated for each real estate transaction and is based on the value of the purchase price.READ ALSO: PURCHASE TAX IN ISRAEL - ONLINE SIMULATION


Intermediaries such as real estate agents, lawyers and shamai (property appraisers) are also important.

Each has a different function:

  • 1) The real estate agent is responsible for finding properties for sale and presenting them to investors,
  • 2) The lawyer handles all negotiations and acquisition rights
  • 3) The shamai is the professional appraiser who will advise the bank on the "real" price of the property, in order to set the basis on which the bank can lend.SEE ALSO: HOW TO CALCULATE RENTAL PROFITABILITY IN ISRAEL?

Aim for added value!

Finally, when it comes to making money from real estate investment in Israel, it's important to calculate the percentage of capital gain you want to achieve.

Purchase prices, transaction costs and resale costs all need to be taken into account. In addition, real estate investors in Israel need to familiarize themselves with the rules and taxes in force, and find out about the tax obligations arising from the resale of property.

The capital gain is taxed at 25 % for individuals, but there are tailor-made tax solutions that are one of our firm's specialties.

Please do not hesitate to contact us.

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Making the right choice

You can invest safely and at your own pace, but it's important to be aware of the various challenges and limitations that the Israeli tax system can bring.

If you're looking for a more detailed explanation of the Israeli tax system, you can contact our accounting firm in Israel, which specializes in real estate. We can help you make an informed, cost-effective decision on your real estate transaction.

What about financing?

To finance the purchase of an apartment, most people turn to a bank for a mortgage.

To do this, you need to check your creditworthiness, compare offers from different banks in terms of interest rates, fees and repayment terms, provide the necessary documents to complete your loan application file, and repay the loan according to the terms of the contract, usually over a period of 15 to 30 years.

Don't forget to compare the offers of different banks to find the one that best suits your financial situation.

Our firm can help you find a loan and (re)finance your property purchase in Israel.

In a nutshell:

Investing in real estate in Israel is still very attractive for the many Jews in the diaspora, even if it's true that certain constraints can be a hindrance.

Even so, current global conditions make it one of the most sought-after markets.

Your questions - our advice

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