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Israel Real Estate
Written by zgtop gurmn   
Tuesday, 25 November 2008 14:18
Whenever you look to buy or sell a property in Israel you take into account the price you must pay (or the price or will receive - if you are selling) when making this deal, but there are expenses, some of them unexpected, that need to be taken into account.
by zgtopgurmn


Whenever you look to buy or sell a property in Israel you take into account the price you must pay (or the price or will receive - if you are selling) when making this deal, but there are expenses, some of them unexpected, that need to be taken into account.

In Israel the purchase tax is paid buy the purchaser in the transaction. It is between 3.5% and 5% of the property price, depending on its value. Israeli residents pay 0.5% less if that is the only real estate property they own.

However, in the case of a couple where one partner owns a property; the other will have to pay the higher purchase tax when buying property. If a property sale happens between family members the purchase tax is only one third of the standard rate.

A sales tax is also assessed on property sales in Israel. The seller has to pay this tax, which is either 2.5% of the purchase price of the property, or .08% of the purchase price in the case of residential properties being sold by contractors. This tax is often not charged if the seller is an individual instead of a corporate entity.

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: On the purchase or sale of property, 2% of the inclusive price of the property. On leasing property for a period of one year or more, one month of rent. Value Added Tax (VAT) is added to any commission due (17%). Payment of the full commission is due on the signing of a binding agreement to purchase or lease a property.

Real estate lawyers have a fee of 1.5% plus VAT when buying a first-hand property from a contractor. This will go to the contractor's lawyer for legal fees. When you buy a property not first hand the lawyer on your behalf will take between 0.5% and 1% plus VAT.

A property inspection engineer (who you may want to bring in to have a look at the property especially if it is a used property) will charge between $400-$500 USD on average; though this may be a little more or less depending on the property's size.

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.

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