Comprehensive Guide: Purchasing an Apartment in Israel as a Foreign Resident (2025)
purchasing an apartment in Israel as a foreign resident
Introduction
Purchasing an apartment in Israel as a foreign resident has become increasingly common in recent years—whether for investment, family reasons, or an emotional connection to the country. However, foreign buyers face stricter regulatory, legal, and fiscal requirements than local citizens and residents. This guide covers every stage of the process, offering practical, up-to-date information and links to relevant official English sources.
Step 1: Eligibility & Initial Planning
Who Is Considered a Foreign Resident?
A foreign resident is someone who does not normally reside in Israel or lacks permanent residency/citizenship. Proper classification directly affects the legal requirements and taxes that apply when purchasing an apartment in Israel as a foreign resident.
Official Definition:
Ministry of Interior – Residency Status (English)
Opening a Trust Account in Israel
Due to strict banking regulations, most foreign purchasers must transfer funds through a legal trust account administered by an Israeli real estate attorney. Requirements include:
- Declaration of the source of funds in accordance with Israel’s Money Laundering Prohibition Law (English)
- Attested and translated identification documents (apostille if required)
- Foreign bank/CPA confirmation certificates
Step 2: Regulatory and Legal Limitations
Buying Property in Sensitive Areas – Defense Ministry Approval
Purchasing real estate in sensitive areas (vicinity of military bases, settlements in Judea and Samaria, or border regions) as a foreign resident requires special approval from the Israeli Ministry of Defense.
Official Resource:
Ministry of Defense – Land Transactions (Hebrew Only; consult with your attorney for English assistance)
Restrictions on Agricultural Land Purchases
Around 93% of land in Israel is owned by the state or the Jewish National Fund. Full ownership is usually unavailable; you may acquire lease rights only. Generally, foreign residents cannot purchase agricultural land or land not zoned for residential use without special government approval.
More info:
Israel Land Authority – Purchasing State Land (English)
Step 3: Taxation – Purchase Tax for Foreign Residents
When purchasing an apartment in Israel as a foreign resident, the purchase tax is higher than for Israeli residents:
| Buyer Type | Purchase Tax up to ₪6.5 million | Over ₪6.5 million | Single Apartment Tax Relief? |
|---|---|---|---|
| Israeli Resident | 0–8% (graduated rates) | 10% | Yes |
| Foreign Resident | 8% | 10% | No |
Foreign residents do not benefit from single apartment relief or staggered purchase tax rates—even if the property is their sole holding in Israel.
Official Source:
Israel Tax Authority – Property Taxes (English)
Step 4: Financing & Money Transfers
Mortgages for Foreign Residents
Some Israeli banks offer mortgages to foreign residents, but typically at lower loan-to-value ratios (50%–60%) and with stricter collateral and guarantor requirements. Legal representation is highly recommended.
Expert Guide:
How to Get a Mortgage in Israel as a Foreigner (Private Legal Site)
Money Transfers from Abroad
All significant transfers must comply with anti-money laundering laws and may be subject to detailed scrutiny by Israeli banks (and regulations in your home country). Delays can occur until due diligence is completed.
Official Guidelines:
Bank of Israel – Transfers and Banking Guidelines (English)
Step 5: Contracts, Registration & Ownership
Registration in the Land Registry (Tabu) or Israel Land Authority
Upon completion, foreign residents may register the property in the national land registry (Tabu) or Israel Land Authority, subject to the type of property. Documentation, certified translations and apostilles, and legal powers of attorney may be required.
Official English Resource:
Israel Land Authority – Land Registration (English)
Reporting and Municipal Taxes
- Purchase must be reported within 30 days to the property tax authority.
- Foreign owners are subject to ongoing municipal taxes and fees (Arnona).
Learn more:
Israel Tax Authority – Real Estate Owner’s Tax Obligations
Step 6: International Tax Considerations
Double reporting/double taxation often applies. Check your home country's laws regarding:
- Foreign property ownership taxes
- Potential inheritance tax
- Bank account reporting requirements
See:
OECD – Taxation of Residential Property (English)
Step 7: Legal Representation and Professional Assistance
Expert legal counsel is vital throughout the process for:
- Opening trust accounts
- Obtaining required governmental approvals
- Drafting and reviewing contracts
- Handling power of attorney and apostille requirements
Find a Lawyer:
Israel Bar Association – Lawyer Search (English)
Flowchart: Stages of Purchasing an Apartment in Israel as a Foreign Resident
Frequently Asked Questions (FAQ)
- Can a foreign resident get a mortgage in Israel?
Yes. Israeli banks may grant mortgages to foreign residents subject to stricter collateral and lower loan ratios. - Can a foreign resident purchase agricultural land?
Generally no—especially state or JNF land, which is typically leased, not sold. - What is the purchase tax rate for a foreign resident buying property in Israel?
8% up to approximately ₪6,500,000 and 10% beyond that amount (2025). - Is double tax reporting required?
Yes, in most countries. Consult a local tax specialist regarding your obligations. - Can a foreign resident register Israeli property under their name?
Yes, but may need additional documentation, translations, and professional assistance.
Additional Professional Tables
| Subject | Requirements & Limitations | Key Resource Link |
|---|---|---|
| Purchase Tax (Foreign) | 8–10% | Israel Tax Authority |
| Banking (Trust Account) | Declaration, verified ID, bank/CPA letter | Bank of Israel |
| Land Registration | Certified/translated docs, apostille | Israel Land Authority |
Recommended Further Reading
- Buying a New Apartment from a Developer – Expert Guide (Hebrew)
- Israel Ministry of Justice – Property Transactions (English)
- OECD – Real Estate Taxation
- Bank of Israel – Home Loans/Mortgages
Summary
Purchasing an apartment in Israel as a foreign resident demands careful legal, fiscal, and logistical planning. Work closely with a legal expert, consult official resources, use trusted professionals, and verify all requirements according to both Israeli and international law. Proper preparation ensures a safe, secure, and beneficial investment in Israel.
This guide is current for 2025, . Legal information should be verified with the relevant authorities and qualified professionals.