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In Israel, both the Buyer and the Seller pay commissions.
Usually 2 % each. As a Buyer, you can choose a Real Estate Agent
first or just look for properties and deal with the individual Agent
who is representing that particular property in Israel. Whichever
path you choose, negotiations are conducted between the Agents.
Once an agreement is reached, the matter is handed over to Lawyers.
Typically, both the Buyer and the Seller should have their own Lawyers.
Consult your Real Estate Agent for guidance in deciding on location,
type of property, understanding what is included in the Purchase
Price, the length of the process, etc.
The fees and taxes involved in a Real Estate transaction
is Israel can be as high as 8%. This includes, Commissions of typically
2% plus VAT (Value Added Tax) - approx. 2.36%, Lawyer’s Fees of
typically 1% plus VAT - approx. 1.18% and Purchase Tax of 3.5% to
4.5 % of the purchase price.
Mortgages for foreign non-residents are available
in Israel. The typical mortgage would be up to 60% of the Appraised
Value, although you can also use EMI (Mortgage Insurance) as a way
to increase the amount of your mortgage. On New Construction Projects
in Israel, you can often get higher % Mortgages than on resale property,
sometimes as much as 80% of the value. Feel free to contact one
or more of the Israeli Banks mentioned on this site for further
information. If you would like a Morgage agent to help you with
financing requirments please fell free to contact us for recommendations.
In Israel, the types of property are:
- Apartment - Building appartment
- Cottage – A dwelling on more than one level,
attached to another dwelling with it’s own private entrance and
garden.
- Villa – A free standing dwelling with garden
attached.
- Penthouse – The top floor or apartment of an
apartment building oftentimes with a roof terrace.
Home sizes in Israel
Homes sizes in Israel are described in terms of the number of rooms,
counting only the bedrooms and living rooms. In other words a 4 room
apartment would most likely mean 3 bedrooms and a living room. Also
sizes of homes or apartments will be expressed in sq meters. 1 square
meter = 10.7 sq ft. If you are buying raw land, sizes will be expressed
in terms of dunams. 1 dunam = 1000 sq meters or 9700 sq ft.
As befits a geographically small country undergoing rapid economic
development, Israel boasts a very active real estate market. Construction
and development in the market is dominated by the private sector,
while the land market is dominated by the government. The real estate
market in Israel has undergone and is continuing to undergo a significant
process of maturation, moving from a market characterized by limited
choice and options and low quality construction, to one which now
boasts a wider range of alternatives in terms of location, size,
building quality, and amenities.
The foreign investor seeking to purchase or lease a property in
Israel for investment or for corporate use should familiarize himself
with the operation of the market in Israel, in terms of pricing
dynamics, location alternatives, the types of property available,
and the legal and financial framework within which the Israeli market
operates.
A practical starting point for understanding the Israeli market
is from the perspective of the various location and site alternatives
which the market presents to the investor and user.
Commercial real estate in Israel is typically found in one of two
types of locations, either center city “central business district”
locations, or in outlying industrial areas which function much as
suburban office parks. The two sources of property serve different
purposes and markets.
Center city locations, such as those in Tel Aviv, Jerusalem, and
Haifa, cater to financial and service businesses, professional services,
media and government offices.
In addition, most retailing has historically been concentrated
within the city and town centers, although the past decade has witnessed
an increasingly dominant trend of construction of shopping centers
and strip malls on the outskirts of the urban areas, adjacent to
major highway and road development.
Industrial areas, located on the outskirts of Israel’s cities and
towns, house a mix of uses, primarily high technology, manufacturing,
and warehousing tenants. These industrial areas have also been the
site of much of the recent growth in retail development. In recent
years, these areas have begun to take many of the characteristics
of suburban office parks, albeit with a higher concentration of
development as is typical in Israel.
Computer, electronics, and other high technology firms, whether
engaged in development or in actual manufacturing, generally seek
locations in the industrial and suburban areas, with a preference
for industrial areas where other similar companies are concentrated,
or separate industrial or suburban office park developments.
This overall trend of office, industrial, and commercial development
outside the urban centers coincides with the rising level of automobile
ownership and subsequent increased mobility of the country’s population
and the trend of private home construction and suburbanization.
Real estate deveopment area's : As part of the
government’s ongoing efforts to encourage industrial development,
particulary in small towns outside of the center of the country,
the Ministry of Trade and Industry administers development grants
and tax incentives for creation of industry in these areas. In addition,
companies seeking land in these areas may apply and receive site
allocations at subsidized prices for construction of factories.
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