Normally property buyers work through an estate agent in Israel and both the Buyer and the Seller pay commissions to their respective Agents, the customary charge being between 2 and 3 % of the price of the property. Your estate agent will be able to give you advice about deciding on a location, type of property, will help you understand what is included in the purchase price, as well as inform you of the length of the whole process. Pay attention to what is included in the purchase price because property in Israel is sold with just the bare walls unless otherwise agreed. Once an agreement is reached, the matter is turned over to Lawyers. Typically, both the Buyer and the Seller have their own Lawyers. The Lawyers do all the necessary research to determine the legal status of the property, insure that improvements that were made were done with the proper permits, etc. One the contract has been signed to purchase your property you must be prepared to make a first payment and your lawyer and estate agent will give you their bills at this point. In addition, a purchase tax of between 3.5% to 5 % of the purchase price is also due, however you do have a 50 day grace period to pay this tax. The total fees and taxes involved in a property transaction can be as high as 9.65% of the property price.
As a foreign non-Israeli resident you are still eligible for a mortgage in Israel. The typical mortgage would be up to 60% of the value of the property, although you can also use EMI (mortgage insurance) as a way of increasing this. If you are buying a new construction project in Israel you can often get a higher mortgage than on resale property. In Israel, you can obtain Dollar Linked Mortgages, Euro Linked Mortgages and Shekel Linked Mortgages, with variable or fixed rates. Banks and mortgage brokers offer mortgages.
There are four basic types of residential property is Israel:
Home sizes in Israel are calculated in terms of number of rooms, counting only the bedrooms and living rooms. In other words a four-room apartment would normally mean three bedrooms and a living room. Living space is calculated in square metres. Land itself is sold in terms of dunams, which is 1000 sq meters.
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