I get asked about real estate surprisingly often given that I know nothing. So I’m sharing this guest post by a lawyer who knows all the ins and outs of Israeli real estate market.
Since laws change quickly, please don’t take this as legal advice. Check everything you’re not sure about with your own lawyer before you make any major decisions. Except the decision to read this article, of course. You have my permission to do that without consulting a lawyer. :-)
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This article is the first of two that will cover the various aspects of buying real estate in Israel. The first article will provide a general overview of the Israeli real estate system, the major differences between transactions in Israel and the United States, and the most important considerations in such a transaction. The second article will cover special issues when the property is new and being bought from the contractor, and also taxation associated with purchasing and selling property in Israel.
What type of property are you buying?
“each type of land involves a slightly different purchase process”
There are two types of property in Israel: privately-owned (private land) and state-owned property administered by the Israel Lands Administration ("Minhal"). Private real property, like in the U.S., is owned by the buyer with title vesting in him. Land is registered in the land registry (Tabu) under the name of the buyer. On the other hand, title to Minhal property does not pass to the purchaser. Instead, the buyer gets a long-term lease to the property which is usually for 49 years with an option for an additional 49 years. Over 80% of the land in Israel is Minhal land, so the buyer should not be deterred from buying it. However, private land is often viewed as preferable. As each type of land involves a slightly different purchase process, one of the first things to check is whether the property is private or Minhal.
Choosing an agent