Costs

When leasing a property, following are the costs that must be taken into account:

Real Estate Broker's Commission

On leasing property brokers customarily charge as follows

1. For a period of one year or more- one months rent.
2. For a period of less than one year- 10% of the total rent (minimum charge $150)

Value added Tax is added to any commission due.

Lawyer's Fees

Most lawyers charge the equivalent of two weeks rent.

Value Added Tax is added to any commission due.

 

When buying a property, following are the costs that must be taken into account:

Real Estate Broker's Commission

On the purchase or sale of property, brokers customarily charge 2% of the inclusive price of the property. Value Added Tax is added to any commission due.

In total this is equivalent to 2.31%

Lawyer's Fees

Most lawyers charge 1%+ V.A.T. (equivalent to 1.155%)

Purchase Tax

The Purchase Tax in respect of residential dwellings is an incremental tax. In order to calculate the tax, the total purchase price of the dwelling is divided into three brackets and a different rate of tax is applied to each bracket, as follows:

• Bracket 1 is subject to tax at the rate of 0%
• Bracket 2 is subject to tax at the rate of 3.5%
• Bracket 3 is subject to tax at the rate of 5.0%

The range of each bracket is adjusted every 3 months in sheqel terms in accordance with changes to the Israeli Consumer Price Index and at present is closely equivalent to the following:

• Bracket 1 (0%)- First 925,000 nis
• Bracket 2 (3.5%)- Between 925.000 nis to 1.300.000 nis
• Bracket 3 (5.0%)- Remainder of Purchase Price

A New Immigrant (Oleh) or a Temporary Resident holding a B-1 visa, pays a reduced rate of Purchase Tax equivalent to 0.5% on the first $250,000 (approximately) of the purchase price of a residential property purchased within five years of Immigration (Aliya). On amounts above the first $250,000 the purchase tax rate reverts to 5%.

In the event that the Immigrant wishes to purchase the residence prior to making Aliyah, the reduced rate will also apply if the purchase is made within one year prior to the date of Immigration. In this case, the tax must be paid in full and the excess will be refunded with proof of Aliyah.