Americans have always led the way in making profitable investments in Israel. And one of the most attractive avenues remains real estate – foreign residents are often driven to buying villas, penthouses, luxury apartments or even land in Israel.
As a non-resident, you too are permitted to purchase property in Israel. But the prospect is ripe for complications due to both the legal and cultural differences. Such as:
There will be technical and logistical difficulties as you do not live in Israel and may visit the country once in awhile or not at all. For instance, you would be better off avoiding properties in certain areas that are no go areas for Israelis or just not a good idea.
Local policies can form a major snag – for instance, there is no title insurance in Israel. Therefore, as the buyer the onus is on you to carefully check the land registry and other documents. Taxes and fees are bound to vary as well.
Legal and bureaucratic hurdles are bound to arise due to your domicile status. Registering the transaction itself can get quite complicated.
The unwritten ways of doing business turn tricky. Be prepared for constant negotiations with the owner or developer as everything is negotiable in Israel! And Israelis can drive a hard bargain any day.
You also need to be wary of price changes while the project is in planning or under construction. Depending on the fluctuations in the consumer price index, you may very well have to pay much more than the original price.
Again, variations in the exchange rate can have a huge impact on the amount you actually end up paying. Locking in the rate is always advisable.
The simple fact that you do not speak the local language (Hebrew) and do not have a local bank account can become a huge barrier in itself.
It is obvious that you need qualified legal assistance to buy real estate in Israel. The legal representation will come in handy for identifying ideal neighborhoods and properties, securing independent appraisals, ascertaining the seller’s rights as well as for ensuring effective negotiation. Skilled legal professionals can further assist you in everything from drafting the purchase agreement and preparing the proper registration documents to transferring money from an off-shore account and land tax planning. They may also help you in obtaining local financing/mortgage for the deal by compiling the necessary reports and returns.
And yet, communication and clarity can become a major problem if your legal counsel is based solely in Israel. You will be better looking for a law firm that specializes in Israel real estate law and yet has local offices in USA, so that they can personally serve your interests to buy real estate in Israel.