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Looking to buy or sell real estate?
Have you decided to rent an apartment, house, office?
Not sure what tax you need to pay on a real estate transaction?

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+972 54-457-5343

HOVELLE, TSAITEL & CO. LAW FIRM is a team of lawyers with many years of experience providing legal services on all matters related to real estate.

  • Preparing purchase/sale agreements for commercial real estate, land plots;

  • Registration of lease agreements;

  • Registration of a donation for all types of real estate;

  • Registration of inherited real estate;

  • Legal support of residents in TAMA 38 projects as well as in “PINUI binui ” projects”

Our office will provide you with full legal support on all matters related to real estate: drafting contracts for rent, purchase and sale of a apartment, transfer of real estate to children or other family members, registration of rights to inherited real estate.

We will represent Your interests as a buyer or seller when concluding contracts for the purchase and sale of real estate.

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Frequently asked questions

If this is the first time you have faced with renting an apartment, congratulations, you have officially ended your childhood. We have all been through it or are going through it.

It has long been known that most people in Israel live in rented apartments. Many Israelis buy housing, rent out their own apartments and rent other apartments for their own needs.

People make mistakes at the very initial stage, they download contracts on the Internet, hoping to save money on the services of a lawyer, but, unfortunately, it all ends with a bad outcome. Most often, tenants who will live in a rented apartment suffer if they have not checked everything at the initial stage.

Legal support for renting an apartment is necessary only because a lawyer checks in advance all the details and conditions for your future home. The check will also be about the status of the landlord: whether there are any debts for the apartment, property rights and all the necessary resources for housing.

What does this law include?

  • The apartment is considered to be non-rentable if there is no electricity or wiring problems, water and sewage systems are not working, fresh air is not available, or there are other problems that threaten the safety or health of the tenant.
  • The landlord cannot shift the payment for real estate services exclusively to the tenant.
  • The landlord of the apartment is obliged to fix all the problems in the apartment if the cause of the malfunction is careless, unusual use of the apartment.
  • The maximum amount of security that the lessor can demand at the time of signing the agreement shall not exceed one third of the total rent for the entire term of the agreement or the total cost of three months of rent (the lesser of the option).
  • The landlord of the apartment undertakes to transfer to the tenant all the property specified in the contract; he will not be able to add to the contract terms the items exempting him from liability for defects found in the apartment.
  • The landlord may not require the tenant to pay the apartment insurance.
  • The landlord will be required to notify the tenant of the termination of the contract at least 90 days before the expiration of the contract. At the same time, the tenant will be able to give the landlord 60 days in advance.
  • The landlord shall have the right to refuse to rent the apartment to third parties, but the reason for refusal shall be reasonable.

Above is only some part of the fair rental law.

Each contract is individual and, of course, in each case there may be many questions and disputes on different topics, but this is what will be discussed with your lawyer. You will disassemble each item and get answers to all questions.

Act, know your rights and live your life in the best way!

When buying an apartment, a buyer will have to pay a statutory tax, so called “mas rehisha”. Without paying this tax or receiving an exemption from it, the buyer, besides everything else, will not be able to register his rights to the acquired real estate.

The amount of tax depends on various things, whether the apartment is the first and the only one in Israel, or second and more. Moreover, it depends on who bought the apartment – an Israeli tax resident or a foreigner.

Tax on the first and only apartment for tax residents of Israel

Starting from 2019, there will be taxed only transactions the amount of which exceeds 1,744,505 ₪ (up to this amount, no tax is levied).

The law establishes the following stages of tax rates:

  1. The cost is up to 1,744,505 ₪ – 0%.
  2. The cost is from 1,744,505 ₪ to 2,069,205 ₪ – 3.5%.
  3. The cost is from 2,069,205 ₪ to 5,338,290 ₪ – 5%
  4. The cost is from 5,338,290 ₪ to 17,794,305 ₪ – 8%.
  5. The cost is from 17,794,305 ₪ – 10%.

It should be noted that these steps apply only to the tax residents of Israel.

Tax on the second and more apartments

The law establishes the following stages of tax rates when buying an apartment in all other cases, that is, not tax residents of Israel and / or when buying an additional apartment:

  1. At a cost of up to 1,292,280 ₪. – – 5%
  2. At the cost of 1,292,280 ₪. to 3,876,835 ₪. – – 6%
  3. At the cost of 3,876,835 ₪. to 5,338,290 ₪. – – 7%
  4. The cost is from 5,338,290 to 17,794,305 shekels. – – 8%
  5. At the cost of 17,794,305 ₪. – – 10%

Tax for new immigrants “ole hadash”

When a new immigrant purchases an apartment (it does not matter if it is the only or additional one):

  1. For part of the cost up to 1,838,615 ₪. – – 0.5%
  2. For part of the cost over 1,788,285 ₪. – – 5%

Tax for the disabled or victims of terror

Persons with disabilities, victims of terror and relatives of soldiers who died in the service are taxed at the following rates if the purchased apartment is the only one:

  1. For the cost up to 1,744,505 ₪ – – 0%
  2. At the cost of 1,744,505 ₪ to 2,500,000 ₪. – – 0.5%
  3. At the cost of over 2,500,000 ₪. – 0.5% (for the whole cost from the first shekel)

It should be noted that if the buyer is a relative of the seller who receives the apartment as a gift, the purchase tax is only 1/3 of the amount of tax calculated by one of these methods.

Tax for non residents of Israel (not residents)

The law establishes the following stages of tax rates when purchasing an apartment for non-Israeli resident:

  1. At a cost up to 1,292,280 ₪. – – 5%
  2. At the cost of 1,292,280 ₪. to 3,876,835 ₪. – – 6%
  3. At the cost of 3,876,835 ₪. to 5,338,290 ₪. – – 7%
  4. The cost is from 5,338,290 to 17,794,305 ₪. – – 8%
  5. At the cost of 17,794,305 ₪. – – 10%

Real estate sale tax, the so called “Mas Shevah”, is levied on the seller when selling the property if the price of the property sold has increased in contrast to the price at which it was purchased. For example, if a property was purchased at one time for an amount of 1,000,000, but now the price has risen by 500,000 and is sold for 1,500,000, then the amount of 500,000 is considered by the government as the seller’s income and is taxed in the process of selling the property.

Since 2014, Mas Shevah (tax on the difference between purchase and sale) has been set at 25% and is paid by the seller when selling the real estate. At the same time, it should be noted that in certain cases, the period of ownership of real estate until 2014, is exempt from taxation. The Law on Real Estate Taxation was amended in the form of formulas for calculating the payment of this tax, so that the exact amount of tax can only be found out if you have all the necessary information.

At the same time, the state does not always collect the tax and the law takes into account various situations in which exemption from this tax is granted.

To be exempt from tax when selling an apartment, you should meet the following preconditions (in aggregate):

  • Apartment construction should be completed (i.e., in case of a new building, the tax is paid before the act of apartment commissioning is received).
  • The apartment belongs to a natural person (not to a company).
  • The apartment is not a business asset of the seller.
  • The apartment is used (or intended) for living.
  • The seller sells all his shares in this apartment.
  • The seller is a resident of Israel, and if he lives abroad, he has the necessary certificates from his country of residence that he has no other apartments there.
  • Exemption from tax is granted up to an amount not exceeding 4,500,000 shek., ie luxury real estate is subject to taxation in excess of this bar.

If the above conditions are met, the seller can choose one of the specific grounds for exemption (the list is not complete):

1. sale of a single apartment:

  • the apartment is the only apartment of the seller in Israel
  • the seller has owned the apartment for at least 18 months since it became a residential apartment
  • the seller has not used this ground for tax exemption for at least the last 18 months

2. sale of the apartment received in inheritance:

  • the seller is the spouse of the testator or his descendant or the spouse of the testator’s descendant
  • before his death, the landlord had only one single apartment.
  • If the testator was alive, he would be entitled to tax exemption

3. one-time exemption on the basis of sale of two apartments (improvement of housing conditions):

  • on the date of sale of the apartment of the first apartment and obtaining exemption on this basis, the seller has only one additional apartment
  • the seller sold the apartment additional apartment, receiving a tax exemption, within one year from the date of sale of the first apartment
  • the total cost of both apartments does not exceed the set maximum limit
  • During the year before or after the sale of the additional apartment, the seller has bought or will buy another apartment worth at least ¾ of the total cost of the first and additional apartment
OUR RECOMMENDATIONS

Specialists in this area

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Tomer Tsaitel
LAWYER AND NOTARY
Tomer Tsaitel is a founder and partner of the Firm.

Mr. Tsaitel is expert in Real Estate and Bankruptcy Law. He also provides services in field of Israeli Bank system, as well as providing assistance in transferring fund to Israel. Mr. Tsaitel knows from his own experience the internal features of government structures, as well as the subtleties of commercial activity.

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Mickey Hovelle
PERSONAL LAWYER
Mickey Hovelle is a founder and partner of the Firm.

Mr. Hovelle is expert in Civil Law, especially in Administrative Law. He knows from his own experience the internal features of government structures, as well as the subtleties of commercial activity.

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