Contrary to the current economic situation, the price of real estate in Israel is rising. While some new-immigrants have ready-cash to buy property, the majority will require a mortgage. Real-estate in Israel is relatively expensive consequently the demand for mortgages is relatively high - mortgages however, are not hard to obtain.
Mortgages
There are various types of mortgages in Israel: linked, unlinked etc. Details of mortgages and loans can be obtained by commercial banks who offer mortgages and from specialized mortgage banks. Housing prices are mostly quoted in US dollars but are paid in Shekels. Your mortgage bank will do all the necessary calculations and conversions to determine the final Shekel price.
A list of some of the banks that offer mortgages in Israel:
First Israel Mortgages simplifies the process of attaining a mortgage in Israel while securing the lowest rates for our clients. With over 10 years of industry experience and strong banking relationships, First Israel’s mortgage consultants pride themselves in excellent customer service and a track record of making the mortgage process as easy as possible.
For more information please contact: Stephen Mauskopf, First Israel Mortgage, Office: 02.567.1349 Mobile: 054.639.9362 Email:
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Website: www.FirstIsrael.com
Adanim Mortgage Bank
Bank Mishkan - Hapoalim Mortgage Bank
Discount Mortgage Bank
First International Mortgage Bank
Leumi Mortgage Bank
Mortgage Assistance to Immigrants
At the date of this article (February 2010), new immigrants are entitled to rental and mortgage assistance as part of their “Aliyah package” as outlined by the Jewish Agency (Sochnut):
-Nominal rental assistance for 4 years, starting from the second year from date of Aliyah.
-Mortgages at special terms (approximately $25,000 per family) for 10 years.
-Discount on purchase tax when buying an apartment, approximately $4,000, for up to 7 years from date of aliyah.
The amount of assistance offered by the government to new immigrants varies according to the location and the socio-economic grading of the applicants in accordance with the criteria of the Ministry of Construction and Housing. Exact details and a breakdown of your entitlement are available from your Federation and/or the Ministry of Absorption. Always verify with them first for any changes and updates.
When taking out your first mortgage in Israel, it is recommended not to exceed a monthly repayment of more than 25 per cent of your total monthly income.
A typical Israeli apartment (3 to 4 bedrooms) generally measures between 90 to 120 sq. meters. For your convenience we have included a typical floor plan for a 3 bedroom apartment in a hi-rise apartment block. Click here
Choosing a location
Most English speaking immigrants prefer to locate to the more central regions of the country; Jerusalem, Tel Aviv and its satellite communities like, always popular, Raanana. Recently Haifa has become a popular destination for English speakers. There are many incentives to relocate to some of the development towns. Options for the religious communities exist as well. Your realtor will give you details on the current rates per square meter in the various cities and communities. Remember the golden rule when purchasing: location, location, location….
The more affluent neighborhoods in Jerusalem are Talbieh, Baka, the German Colony and Rehavia. In Tel Aviv; the Northern Suburbs, Ramat Aviv and the beachfront are popular, luxurious neighborhoods. Tel Aviv’s satellite cities; Rehovot, Givatayim and Ramat Gan are growing in popularity. Towns like Raanana, Kfar Saba, Netanya, Herzliya have always been popular amongst English speakers. In Haifa the suburbs of Denya, Ahuzza, Carmeliya and Ramat Almogi are also some of the favorites. Of course beautiful, comfortable and affordable homes are available in all the suburbs, all over the country.
Seniors who have the available funds can join one of the many luxurious retirement villages around the country. These residences offer communal services, security and medical assistance etc. Some retirement facilities are geared to specific communities. Bet Joolis in Haifa for the German community and for English speakers – Beth Protea in Herzlia.
BETH PROTEA is an award winning retirement facility situated in Herzlia and provides exemplary Nursing Care. This unit offers warmth, care and activities suited to each individual’s particular requirements, ensuring your loved one maintains the highest quality of life.
For more information contact Lynn Lochoff at tel: 09-9595200 or by email:
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website: www.bethprotea.org.il
There are various options for the elderly in Israel. Counseling services on pensions, rights, home assistance, shopping etc., are available at some of these facilities -. Bnei Brith, the Freemansons, the medical fraternity and others also have their own retirement facilities. There are varying types of accommodation available from shared rooms to private dwellings in cluster units.
Property Tax (Arnona)
Although property in Haifa is a lot cheaper compared to Tel Aviv or Jerusalem, property taxes in Haifa, are higher.
New immigrants are also entitled to a reduction on their property taxes (arnona) for one year. You may also obtain a special reduction on your property tax if you are a senior citizen, disabled, single parent, holocaust survivor etc. To verify eligibility for a reduction, consult with your emissary (shaliach). Your local municipality will also be able to advise you on any discounts your may be eligible for. You will need suitable documentation to back-up your request for a discount.
Some municipal contact information:
Jerusalem Municipality
Tel Aviv Municipality
Haifa Municipality
Raanana Municipality
Land Acquisition Tax
When purchasing an apartment or house, everyone is liable to pay Land Acquisition Tax (mas rechisha). This tax is based on the cost of the apartment, as well as the personal status of the person buying it. Citizens, immigrants and tourists are entitled to different benefits and are liable for different amounts of tax. Consult with a real-estate lawyer who will explain the details and will help you work out the most advantageous package and details of Capital Gains Tax if necessary.
The Property Tax Division can provide compensation to those whose personal property was damaged during security related incidents. Applications can be made at the following branches:
Beer Sheva (31 Sderot Shazar)Tel: 08-629 3555 Haifa (15 Hapalyam)Tel: 04-863 0400 Jerusalem (66 Kanfei Nesharim)Tel: 02-654 5222 Tel Aviv (125 Menachem Begin)Tel: 03-763 3333
Real Estate Lawyer
When signing a purchase agreement the real-estate lawyer will help you to understand the agreement and its implications. The real-estate lawyer will probably charge you a percentage of the value of the property rather than an hourly fee. Verify this accordingly.
When purchasing an apartment from a developer it is also recommended to take legal advice from a real estate lawyer who will take all measures to ensure and protect your rights as purchaser. Your lawyer will also check ownership rights on the land and verify whether this is land that appears on the Land Registry (known as “Tabu”), at the Israel Lands Authority or with a housing company.
Real Estate Agents
In 1997 the government passed a law which oversees and regulates the work of Real Estate Agents. Presently, the agent must pass a licensing exam in order to work in the field. It is recommended to sign an agreement between the client and the agent detailing properties that were shown and the final fee and terms of payment on the purchase. The law also specifies that the agent is entitled to a fee only if they were instrumental in finalizing the deal.
The customary commission in Israel is 2% + VAT of the purchase price from both the seller and the buyer. You may be able to negotiate a different fee and arrangement with the agent.
Renting
Of course, if you are not in a position to buy, renting is the alternative. You can arrange a rental through your realtor which may be the best course of action if you have not yet made Aliyah. New immigrants may not know the suburbs in the city and the types of accommodation available in each one. Having a real estate agent accompanying you on this journey is useful.
Renting an apartment is Israel is challenging. A new English website called - Househunt.co.il has just been launched. There are some websites, in Hebrew that also list available rentals:
www.yad2.co.il
www.homeless.co.il
www.winwin.co.il
www.madas.o.il
Also the large real-estate agencies have websites that can be of help:
Anglo-Saxon
Century21 has an English website
Other ways to find a rental are through the local newspapers, public noticeboards in the area of your choice, notices posted on trees and lampposts, via friends, forums and Facebook or similar pages.
The Haifa Association for Immigrant Absorption, as part of their service, has substantially enlarged the number of volunteers who are willing to help new-immigrant residents of the city. If you would like to be paired with a volunteer who may be willing to help you in your house-hunt contact this website:
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and we will link you to the appropriate office.
Many of Israel's cities and towns have local forums like: Janglo, Telalivit, Newraananalist, Hanglo, Haifalist, Rbslist (Ramat bet Shemesh), 5Towns and more.
You can approach real-estate agents in the city or town of your choice; they generally charge 1 months' rent for their service.
There is no standard rental contract in Israel, but you can buy different versions of a contract in some stationery stores. Your landlord may present you with a contract that he drew up with his lawyer. Take into consideration that the contract will, in all probability, be in Hebrew. A real estate lawyer will charge you around half a month's rent to translate and go over a rental contract with you in detail. If you can, ask a relative or a friend who speaks good Hebrew to go over the contract with you but realize that there may be some points and nuances that they may miss.
A typical rental contract may include some or all of the following points. Make sure that you have clarified these issues before signing the contract:
- Identity and details of the landlord.
- Israelis living in other cities or abroad often appoint a friend or relative to handle matters on their behalf. Make sure you have all the details of that person as well.
- Make sure that the person renting the property has the authority to do so – you don't want to get caught up in a scam!
- Description of the property - the lounge is considered as a room in Israel. A 4 roomed apartment means 3 bedrooms and a lounge. You may be offered a 3 1/2 roomed apartment. This means that one of the bedrooms is very small and you may only be able to fit a bed and a small wardrobe/closet. Often a landlord will close one of the rooms off and store his personal possessions in the room. Make sure that this is taken into account both in the rental agreement and in the price. Gardens, storerooms and parking spots must also be stipulated.
- Protected tenants law – it was very common many years ago to rent a property for "key money" and this is what this clause refers to. Mostly this does not happen anymore.
- The purpose of the rental: residential, home-office etc. If you are planning on using the property as a home-office check with your accountant for possible tax deductions.
- Verify who can live in the apartment with you – roommates, visitors, pets etc.
- Duration of the lease, notice period and regulations (written or verbal)
- Option to extend the lease and if there is a possibility to shorten the lease.
- Rent – how much, method of payment, frequency (monthly, quarterly etc.). It was common practice, some years ago, to quote the cost of the rental in US$, to be paid in accordance with the exchange rate, in shekels, on the date of the transaction. Mostly, now that the shekel is a more stable currency, rent is quoted in shekels.
- The state and condition of the property and who is liable for any repairs.
- Contents and condition of any furniture, appliances, light fittings or other items that come with the apartment – make a list of the contents.
- Our Tip: Take photographs of the apartment, furniture etc. in case of disagreement.
- Check plumbing, gas and electrical – flush all toilets, open all taps, check that there is hot water, switch on all lights, check that the gas balloons are in working order and that all appliances are in working order too.
- Take meter readings – water and electricity
- Is there insurance on the structure, its contents and third party?
- Cosmetic changes – painting, hanging pictures or shelves etc.
- Vad habayit (house committee) – the tenant is only responsible for the regular monthly payments. Make sure you give the money directly to the house committee, not via the landlord.
- Penalties – agree on a rate. Whether the landlord does not hand over the apartment on time or if the tenant does not vacate the property on time, it should be the same rate for both sides.
- Guarantees – this could be in the form of a cash deposit, a bank guarantee or two guarantors. The guarantors must have a job and an income.
- At what point will the guarantee be returned to you and under what conditions. This is a very important aspect of the rental agreement. Landlords often come up with all kinds of reasons in order not to return part or all of the guarantee or deposit.
- Visits by the owner/landlord/agent - by prior coordination and at regular hours.
- If the property is sold during the course of the contract you must have the option to remain in the property until the end of the lease period. However if you want to vacate the property, under these circumstances, you should have the option to do that too.
Terminology
In your country of origin the terminology used to describe different types of homes may differ to that used in Israel. Local definitions are as follows:
Villa – a free-standing, detached home, that sits on its own plot of land, unattached to any neighbors - size is irrelevant.
Cottage / Du Mishpachti – a semi-attached house that sits on the ground and has a garden. The property has a shared wall with a neighboring resident. No other home is above or below.
Duplex – a two- or three- storey home that sits above and/or beneath another home it may have a garden and/or balcony.
Penthouse – the apartment on the top floor of an apartment building ensuring there is no neighbor living above and usually having the largest balcony and the best view in the building.
Flat / Apartment – a single storey apartment that may sit above and/or below another home.
Medurag - Terraced - refers to construction on a mountain side, where the homes have been built at different levels in order to accommodate the slant and height of the mountain. Usually, homes are accessible by stairs or elevator from both the top and bottom of the complex.
Some useful contact information:
The Ministry of Construction & Housing Tel: 02-584 7211 www.moch.gov.il (Hebrew only) Whether you choose to rent or buy a property in Israel,
the Anglo-list.com welcomes you to your new home.
DISCLAIMER: THIS ARTICLE IS MADE AVAILABLE TO VISITORS TO OUR WEBSITE AS A COURTESY. IT IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. PERSONS SEEKING LEGAL ADVICE CONCERNING ISRAELI LAW SHOULD CONSULT WITH A QUALIFIED ADVOCATE ADMITTED TO PRACTICE IN ISRAEL.
Phonetic list of words and phrases.
