Israel’s real estate market attracts interest from buyers worldwide.
Whether for personal use, investment, or ideological reasons, owning a piece of the Holy Land is an aspiration for many.
In July 2024, property sales surged by 29% year-over-year, with foreign investor purchases rising by 62% compared to the previous year. This growing demand is influenced by various factors, including geopolitical events and global economic conditions. Notably, the aftermath of the October 7 attacks and subsequent conflicts have heightened security concerns, prompting many Jews worldwide to consider relocating to Israel.
Despite these challenges, Israel’s real estate market has demonstrated resilience. In the first quarter of 2024, the average price of owner-occupied dwellings increased by 12.75% year-over-year, marking the fifteenth consecutive quarter of growth.
The good news is, yes, foreigners can buy property in Israel, but the process involves specific legal, financial, and practical considerations. Therefore, it’s important to understand the legal, financial, and practical considerations involved in purchasing property in Israel.
While the market offers promising opportunities, navigating its complexities requires careful planning and professional guidance.
Understanding How Land Ownership Works in Israel
Before we get into the legal details about foreign ownership, it helps to know how land is distributed in Israel:
- About 93% of Israel’s land is publicly owned. This includes land managed by the Israel Land Authority (ILA) and the Jewish National Fund (JNF). Public land is typically leased for up to 49 or 98 years rather than sold outright.
- The remaining 7% is privately owned, which is the primary focus for foreign buyers. Private land purchases do not require Israeli citizenship or residency.
Because so much land is controlled by the government or the JNF, many communities, known as Moshavim, let people buy homes with farmland through long-term leases. These often require the buyer to be an Israeli citizen. A similar situation exists in planned communities called Yishuvim, where citizenship can be a requirement as well. These rules help maintain the communal nature of these areas.
However, when we talk about property that foreigners can buy, we are usually referring to that 7 percent of land that is privately owned. It is possible for anyone, including those who are not Israeli citizens, to buy property in that category.
Can Foreigners Buy Private Property in Israel?
The answer is a clear yes.
Foreigners, regardless of nationality or religion, can purchase privately owned property in Israel. However, this comes with caveats. Private property transactions in Israel must be carefully vetted to ensure proper ownership and legality.
Potential buyers can use the Land Registry (Tabu) to confirm ownership details of a property. This registry is often referred to as the “Nesech Tabu”. It shows the names and identification numbers of the registered owners.
Accessing the Nesech Tabu requires a small credit card fee, but it provides clarity about whether the plot is publicly or privately owned. This step is highly recommended because it prevents misunderstandings about ownership eligibility and clarifies who has the legal right to sell the land.
The Legal Basis for Foreign Ownership
Israel’s Basic Laws govern property ownership.
There is no requirement that buyers be Israeli citizens or residents when purchasing private land. This open policy stems from the principle that Jews worldwide should have a pathway to own land in their ancestral homeland.
However, this policy has also led to cases where non-Jewish entities, including those hostile to Israel, have acquired privately owned land in an effort to influence demographics. This aspect of land ownership sparks ongoing discussions about sovereignty and national security.
In practical terms, there is a clear distinction between leasing government (or KKL) land and buying privately owned property. Any foreign buyer interested in farmland in a moshav or a plot in certain planned communities will likely face citizenship or residency prerequisites.
Yet those rules do not apply to private land, which is why foreigners regularly invest in apartments, single-family homes, and commercial buildings in major cities like Tel Aviv, Jerusalem, and Haifa.
Step-by-Step Guide for Foreign Buyers
The actual process of buying a home or land in Israel follows straightforward legal steps, though local nuances do matter. Working with a qualified lawyer and a knowledgeable real estate brokerage can ease the journey.
Here is an overview of what to expect:
Step 1: Identify Available Properties
Foreign buyers usually focus on the 7% of Israeli land that is privately owned, including registered apartments and houses.
You can start your search using online real estate platforms, working with local agencies, or asking for personal recommendations. Before getting too attached to a property, it’s smart to have a professional check its status through the Nesech Tabu (Israel’s Land Registry) to ensure clear ownership.
Step 2: Conduct Due Diligence
Once you find a property you like, it’s important to conduct thorough due diligence. This includes verifying the ownership, checking for any debts or liens, and reviewing zoning laws to confirm the property is legally in good standing.
An experienced lawyer specializing in Israeli real estate law will usually handle this step, giving you peace of mind that everything checks out.
Step 3: Sign a Preliminary Agreement
Before signing the final contract, buyers and sellers often agree to a preliminary document, such as a Memorandum of Understanding (MOU). This outlines the agreed price, payment plan, and other purchase terms. While it’s not always legally binding, it helps set expectations and ensures everyone is on the same page.
Step 4: Draft and Sign the Contract
The formal purchase agreement is legally binding.
At this stage, your lawyer will confirm that the seller has clear legal ownership of the property and that the contract complies with all Israeli laws. This step also ensures there are no outstanding financial or legal issues tied to the property. Once signed, the deal is official.
Step 5: Register the Property
After signing the contract, the final step is registering the property with the Israel Land Registry (Nesech Tabu). Registration officially transfers ownership and provides you with full legal protection.
The buyer’s name will be recorded in the official database, completing the process.
Step 6: Pay Taxes and Fees
Foreign buyers are subject to taxes, which varies based on property value. Purchase tax (Mas Rechisha) is one of the most significant costs.
Here’s how it works:
- Foreign residents pay 5%–10% in purchase taxes, depending on the property value.
- Israeli residents, in comparison, enjoy exemptions for properties valued under NIS 1.74 million and lower rates for higher thresholds.
For new immigrants (olim), reduced tax rates apply for seven years: 0.5% for properties up to NIS 1.84 million and 5% above that. These tax incentives make it appealing for those planning to make Aliyah or establish permanent residency.
Other fees, such as attorney fees and bank fees, may also apply. It is suggested that buyers factor these costs into their budget.
How Seaview Israel Can Help You
Seaview Israel stands ready to assist foreign investors in every aspect of property ownership. Many individuals worry about high property management fees or hidden costs that can accumulate over time. Seaview Israel resolves those concerns by offering management support without extra costs or a burdensome flat fee structure. This includes tasks like supervising repairs, ensuring rent is collected on time, and staying in touch with local service providers.
Whether you need a reliable contractor, a trustworthy lawyer, or someone who can handle bureaucratic steps in Hebrew, the Seaview Israel team has you covered. The company’s focus on transparent, customer-centered service makes the ownership experience feel more secure.
By choosing us, foreign buyers can invest with greater peace of mind.
