The Market Was Thought To Be In A Bubble
Given the cyclical nature of any economy, there are bound to be downturns or periods of turmoil. However, the real estate market in Israel has been holding up for the past years, despite the fact that even the country’s Finance Minister pointed out that the market was in a bubble. This took place in 2016, and The Bank of Israel also warned about the housing market throughout the years, but the bubble has yet to burst[1]. And while the sector could deflate in order to correct its course, it doesn’t imply that a market crash is necessarily imminent, meaning that things might not turn as bad as experts are predicting.
93% Of Land Is Owned By The State
The idea of homeownership is slightly different in Israel, and buying a home doesn’t necessarily mean owning it[2].In many cases, houses are being leased from the State and they are not technically owned by individuals. However, due to the fact that the leases are prepaid for many years in advance, “leasing” a house from the state is virtually a similar venture as homeownership. While private ownership is preferred by most people, “owning” a home is not something that is turned down by Israelis simply because it features a State lease.
7% Of Land is Privately-Owned
Generally, privately-owned land is the most sought after due to the fact that it can be purchased by any foreign citizen (including individuals who are not Jewish), and there are no restrictions involved or special conditions. Most of the land that is privately-owned is found in urban areas, such as Haifa, Jerusalem, and Tel Aviv.
Letters Of Intent Are Insisted Upon
A lot of sellers in Israel will insist that the buyer signs a letter of intent after the initial handshake takes place. While this could seem like a simple formality, the reality of it is that the letter of intent can turn into a binding contract. This is titled a “zichron devarim” and is considered a memorandum of understanding. Signing this letter of intent can trigger off requirements in regards to taxes[3] (for example: the Acquisition Tax – a progressive tax that becomes payable 50 days after entering into an agreement to buy a place), which is why it’s important to consult a real estate law firm before anything gets signed. The real estate lawyer will look over the memorandum and make sure that everything is in its right place.
Obtaining A Title Is Not Instant
Obtaining the legal title on the home that was purchased and paid for takes time in Israel. Owners can wait for months before obtaining it, due to the structure of the real estate market in Israel and how transactions are being handled. It’s important for this matter to be handled by a real estate law firm in order to make sure that the period between the payment and obtaining the title goes without issue.
About David Page Law Firm
Founded by David Page, the firm tackles cases in many areas, with Page being a business, regulatory, corporate, and financial attorney who is active in Jerusalem and Tel Aviv. You can learn more about the firm and the real estate lawyer himself by going to davidpagelaw.com or by calling +972.544.636.824.
