Property & Real Estate Q&A

Yes, a non-resident can buy a building plot in Israel, but the tax and planning rules differ from buying a finished apartment. Purchase tax on land is a flat 6% rather than the residential rates, with a partial refund if you obtain a building permit for a home within a set period. Before buying, you must confirm the plot is zoned for residential building, because agricultural or unzoned land often cannot be built on at all.

You can use the money, but not the account. Neither an RRSP nor a TFSA is allowed to hold foreign real estate, so you cannot register an Israeli apartment inside the plan. A TFSA withdrawal is tax-free in Canada and is the clean source of funds. An RRSP withdrawal is fully taxable at your marginal rate with CRA withholding of 10 to 30 percent, and the Home Buyers' Plan does not apply to a home outside Canada. On the Israeli side you then pay purchase tax at the non-resident rate.

You can, but Israel will not tax the discounted price you agree. Under the Real Estate Taxation Law 1963, a sale or gift between relatives is assessed on the full market value set by the Israel Tax Authority, so the betterment tax (mas shevach) is calculated as if you sold at market. A gift to a child can qualify for reduced or nil purchase tax for them, but on the UK side HMRC also treats a disposal to your child as made at market value, so you may face UK capital gains tax with a credit for the Israeli tax.

It depends on the defect. The Sale (Apartments) Law 1973 sets an inspection period (tekufat bedek) that runs from one year for finishes up to seven years for structural and foundation defects, followed by a further warranty period (tekufat achrayut). During the inspection period the burden is on the developer to prove a defect is not their fault; during the warranty period it shifts to you. The law is cogent, so a contract clause that shortens these periods or waives your rights is void.

No. A resale apartment bought from a private seller carries no VAT, because a private individual is not a registered dealer under the Value Added Tax Law 1976. VAT at 18% only applies when you buy a new home directly from a developer or other business seller, and in that case the price is almost always quoted VAT-inclusive. Either way you still pay purchase tax (mas rechisha), which for a non-resident starts at 8% from the first shekel.

No. Israeli law gives no general statutory cooling-off period for a property purchase, so once you sign a binding sale agreement (heskem mecher) under the Land Law 1969 you are committed, and even a signed memorandum of terms (zichron devarim) can bind you. Pulling out usually means forfeiting a deposit and paying agreed damages, commonly set at around 10 percent of the price. Off-plan buyers get separate financial protections under the Sale of Apartments laws, but still no free cancellation window.

You can, but short-term letting is treated very differently from an ordinary long-term tenancy. Once you rent nightly through Airbnb or a similar platform, the municipality may require a business licence under the Business Licensing Law 1968 and bill arnona at the higher hospitality rate, and the income usually does not qualify for the flat 10% residential rental track under Section 122 of the Income Tax Ordinance 1961. Above roughly NIS 120,000 of annual turnover you also cross the VAT registration threshold. Run from abroad, this realistically needs a licensed local manager.

Often yes. A zichron devarim, the short memorandum buyers and sellers sign before lawyers get involved, can be a fully binding contract under Israeli law when it shows a clear intent to commit and fixes the essential terms. Section 8 of the Land Law 1969 requires only that a real estate commitment be in writing, and a signed one-page memo can satisfy that. Non-residents who sign one to hold an apartment during a visit have found themselves locked into the purchase.

Yes. Israeli law places no restriction on joint ownership by non-residents, so two or more foreign buyers can be registered as co-owners of an apartment, each holding a defined share. Purchase tax is assessed on each buyer's own share at non-resident rates, and default co-ownership under the Land Law 1969 lets any co-owner later demand dissolution. Unrelated co-buyers should sign a co-ownership agreement alongside the purchase, since there is no automatic right of survivorship if one of them dies.

Legally an SCI, or any foreign company, can hold Israeli real estate, but it is usually the wrong vehicle. For Israeli tax the SCI becomes a real estate association (igud mekarkein) under the Real Estate Taxation Law 1963, so transfers of its shares are taxed like transfers of the property itself, and it loses the exemptions and reduced purchase-tax rates available to an individual buyer. What is tax-transparent and convenient in France can be opaque and expensive in Israel, so the two-country picture has to be modelled before you buy.

The seller pays the municipal betterment levy (heitel hashbacha), not the buyer. It is charged by the local planning and building committee under the Planning and Building Law 1965 when a planning decision raised the property's value, and it falls due on sale at 50% of that increase in value. A buyer's real concern is confirming the seller has cleared it, because the Land Registry will not transfer the property without a levy clearance certificate.

No. Receiving property by inheritance is not a taxable sale under the Real Estate Taxation Law 1963, so heirs pay no purchase tax (mas rechisha) when a succession or probate order transfers the deceased's flat into their names at the Land Registry. Two traps remain: dividing the estate unequally with a cash payment from outside it can trigger tax, and a later sale is charged betterment tax (mas shevach) from the deceased's original cost, not from the value at death.