Mazal tov! You are seriously considering buying a home in Israel. What are the costs and fees involved in this major transaction that you are going to see from this point on? Aside from the obvious expenses such as furniture and appliances, there are various fees that are associated with purchasing property in Israel.
The main fee is called Purchase Tax ("Mas Rekhisha"). Three-four years ago, foreigners in Israel paid a Purchase Tax starting at 8%. Now, in an effort to rebuild the economy from the COVID pandemic, the fee has been lowered, starting at 5% and varying depending on the price of the property.
Another fee is that of the real estate broker you work with. The Broker’s Fee is 2% + Ma’am (like GST) (17% of the 2%) and is payable once you close on a home through the broker.
Attorney Fees are not set or regulated, but they are expected to be between .75% - 1.25% + Ma’am.
As far as the mortgage fees go, brokers charge 1% + Ma’am. For example, if you are purchasing a property for 4,000,000 NIS, and take a loan of 2,000,000 NIS, the fee is 20,000 NIS + Ma’am.
Additional fees also include bringing an inspector to check the home before signing the contract. Inspections must be done before signing the contract! This costs about $500- $1,000 USD.
These are the main fees associated with purchasing a property in Israel.
For more information or to begin your property search in Jerusalem, please contact us today!