Buying property in Israel can be both a personal dream and a smart investment. Whether you’re eyeing a modern apartment in Tel Aviv, a historic pied-à-terre in Jerusalem, or a luxury villa in Herzliya, foreign buyers have opportunities—but also face unique challenges. From legal regulations to mortgage requirements, understanding the process is key to a smooth purchase.

Who Qualifies as a Foreign Buyer?

In Israel, a “foreigner” is anyone who isn’t an official resident, including:

• Individuals living abroad

• Tourists

• Future immigrants planning to make Aliyah

Foreigners can buy most residential and commercial properties, but there are some limitations:

• State-owned land (around 93%): Foreigners typically lease this land through the Israel Land Authority (ILA). Jewish foreigners eligible under the Law of Return may have additional rights.

• Private land: Can be fully purchased.

• Agricultural land: Usually restricted to Israeli farmers or cooperative members.

Tip: If you plan to make Aliyah, buying property up to a year before your immigration may still qualify you for special Olim Hadash benefits, including reduced purchase tax and access to government-backed mortgage loans.

Types of Property Available

Foreign buyers can choose from several property types:

Apartments & Condos
The most common choice. Many are built on leased land, but the unit itself can be fully owned.

Private Homes
Available in cities like Caesarea, Ra’anana, and Herzliya. Legal due diligence is essential to confirm land ownership.

Commercial Properties
Purchasing commercial real estate is possible but requires extra care with permits, zoning, and taxes.

Leasehold vs. Freehold

• Freehold: You own both land and building outright.

• Leasehold: You own the building but lease the land (usually up to 99 years). Always confirm land status with your lawyer and the Tabu (land registry).

Legal Requirements for Foreign Buyers

Buying property in Israel requires careful legal preparation. Key requirements include:

Required Documents

• Valid passport and local ID (if applicable)

• Israeli tax ID number

• Proof of income for the past 2–3 years

• Bank statements and asset declarations from your home country

• Notarized translations of all documents into Hebrew or English

• Tax certifications from a local advisor

Other Legal Considerations

• Anti-money laundering checks: Banks require documentation for source of funds and proof of income.

• Power of attorney: If buying from abroad, a lawyer in Israel can act on your behalf.

• Land registration: Ownership is only official once registered with the Tabu.

• Reporting obligations: Property purchases must be reported to Israeli tax authorities.

A real estate lawyer experienced with foreign buyers is essential to navigate contracts, land classification, zoning, and tax obligations.

Mortgages for Foreign Buyers

Foreign buyers can secure mortgages, but with stricter conditions than residents:

Key Differences

• Maximum financing: 50% of the property value (vs. 75% for Israeli citizens)

• Higher interest rates

• Proof of income required from both local and foreign sources

• Israeli bank account mandatory

Mortgage Options

• Fixed-rate mortgages to protect against market fluctuations

• Foreign currency-linked loans (USD/EUR) to reduce exchange rate risk

• Combination structures to balance risk

The Process

1. Gather, translate, and notarize all required documents

2. Open an Israeli bank account

3. Submit the mortgage application directly or via a broker

4. Wait for approval, usually 4–8 weeks

5. Sign contracts and finalize the mortgage

A specialized mortgage broker can streamline this process, handle negotiations with multiple banks, and secure more favorable terms.

Taxes and Fees

Foreign buyers should budget for:

• Purchase tax: Up to 8% for non-residents; reduced rates for Olim Hadash

• Legal fees: Lawyers, notaries, and registration costs

• Other costs: Insurance, international bank transfers, and potential home-country tax obligations

Olim Hadash Advantage: New immigrants benefit from lower purchase taxes and government-backed mortgage loans, even if the property is purchased before officially making Aliyah, provided it’s within the qualifying timeframe.

Tips for a Smooth Purchase

• Start early—the process takes longer for foreign buyers.

• Hire a qualified Israeli real estate lawyer.

• Pre-approve your mortgage before signing contracts.

• Plan international money transfers ahead of time.

• Translate and review all documents carefully.

• Verify land status and property registration through the Tabu.

Why Buy Property in Israel?

Buying property in Israel is not just a financial decision; it can also be deeply personal:

• Investment potential: Real estate in major cities like Tel Aviv and Jerusalem appreciates steadily.

• High demand: Rental opportunities often cover mortgage repayments.

• Cultural connection: For Jewish and other heritage-minded buyers, property provides a home base in Israel.

• Tax benefits: Olim Hadash enjoy purchase tax reductions and government-backed mortgages.

Ready to Make Your Move?

Buying property in Israel as a foreigner involves unique challenges, but the rewards can be significant. With the right guidance, you can secure a mortgage, navigate legal requirements, and make a confident investment in your dream home.

Contact us today at hello@lendabroad.com for a free mortgage check-up!