Real Estate in Israel – The Complete Guide

Real Estate in Israel – The Complete Guide

Chapter 1: What is the historical framework of Israeli Land Law?
Chapter 2: Important terms to remember
Chapter 3: What are the typical steps in buying an apartment in Israel?
Chapter 4: How long will it take to buy an apartment in Israel?
Chapter 5: Choosing the right real estate agents
Chapter 6: A guide to investigating an apartment
Chapter 7: Using the internet to look for, price, and research apartments
Chapter 8: Financing your purchase as a foreigner
Chapter 9: Taking a mortgage
Chapter 10: Buying an apartment as an investment
Chapter 11: Choosing a Lawyer
Chapter 12: Getting the best tax rate on your apartment
Chapter 13: Signing a Contract
Chapter 14: Registry
About Cohen, Decker, Pex, and Brosch


Chapter 1: What is the historical framework of Israeli Land Law?
Since this is a legal booklet, it bears mentioning that real estate property ownership in Israel is governed by regulations and required procedures. As you read through this booklet you will find this legal framework to be far from irrelevant to your apartment search, and hopefully understand that knowledge of the law can actually help you be more successful in buying the right apartment. We think that to start with, having a brief historical understanding of the developments which constitute today’s legal framework can help you more quickly resolve questions you might have.

During the second half of the 19th century, while the Ottoman Empire still administered the land of Israel, it embarked on a land reform program requiring all land owners to register ownership of their lands at a special government office, the land registry. Towards the end of the century, Jewish settlement groups – particularly the largest one, Jewish National Fund (or JNF, which is administered by the World Zionist Organization) – began purchasing large swaths of land to be developed and settled by the planned future Jewish state. Their activity continued into the administration of the British Mandate for Palestine; whose local sovereignty replaced the Ottomans’ in 1917.
By the time State of Israel was established in 1948, the JNF was the most significant land owner besides the British government. The JNF had up this time prohibited any resale of its lands, preferring instead to implement a policy of long-term lease to individuals and corporate bodies. This policy had allowed the JNF to tightly control and to continue developing its real estate holdings in Israel. By 1948, when Israel was established, the JNF had already been acquiring and developing land for about 50 years, and we will see that those early policies of the JNF are at the core of Israel’s lands policy even today.When the State of Israel came into existence, the new state expropriated all lands vacated by the outgoing British Mandate administration. This means that at its establishment the State of Israel owned – both directly and via its predecessor, JNF – about three quarters of the land of Israel.Shortly, legal complications arose from dual-ownership listing of JNF and state-owned lands in the Ottoman land registry (which was still being utilized), and the state of Israel and the JNF entered into a covenant establishing a new state agency, to be called the Israel Lands Authority (ILA), which would administer all lands owned by both the state and JNF. Today, this government body is the custodian of all lands of the State of Israel – about 80% of which is directly owned by Israel, and about 13% by the JNF, with only about 7% of Israeli land being privately owned. Like the JNF before it, the ILA is prohibited by law from selling any of its substantial holdings. In 1969, it was decided to officially measure, map and categorize the land into a tapestry of blocks, parcels and sub parcels. The regularization process begun in 1969 continues to this day, and as of 2019, is about 95% complete. The remaining 5% of land is slated for regularization soon.

The Takeaway:
• The ILA administers lands in Israel. 93% of the land in Israel is government-owned, and leased by the ILA to private individuals for periods of 49 to 98 years. The state does not repossess the land when the lease runs out. The remaining 7% is privately owned.

Chapter 2: Important terms to remember
Israel Land Authority (ILA) The government body which maps, regulates and manages all lands of the State of Israel. Established to directly administer Israeli State and Jewish National Fund owned lands, which together constitute 93% of the land of the state of Israel.
Privately Owned Land: The other 7% of the land of the state of Israel, owned by neither the State nor Jewish National Fund.
Registry: The association of an individual’s name with rights to a specific property or apartment which constitutes final, legal proof of ownership of the rights to the property in question.
Land Registration Bureau: The local physical registry (offices) of the ILA at which registry is performed by an attorney. Registration at the LRB is the only legally guanranteed form of registration.
Warning Mark: A note at the LRB indicating a commitment by a current individual registered owner of the rights to a property to make a change in their relationship to the property, or to refrain from making such a change, and often registered in favor of another person.
Escrow: The period of time between agreeing to the terms of an apartment sale and signing a contract to buy the apartment, during which many important investigations usually happen.
Purchase Tax: Tax owed to the government for buying an apartment, marginal relative to the value of the apartment .
Arnona: Local municipal tax relative to the size and location of an apartment which must be paid monthly on an ongoing basis.
Block: The largest categorization parameter in the land registry, equivalent to the size of a city block, made up of parcels.
Parcel: The second largest categorization parameter in the land registry, typically the size of an apartment building, made up of sub-parcels.
Subparcel: The smallest categorization parameter in the land registry, an apartment.