It is useful to keep in mind that home sizes in Israel are described in terms of the number of rooms, counting only the bedrooms and living rooms. In other words a 4 room apartment would most likely mean 3 bedrooms and a living room. Also sizes of homes or apartments will be expressed in sq meters. 1 square meter = 10.7 sq ft. If you are buying raw land, sizes will be expressed in terms of dunams. 1 dunam = 1000 sq meters or 9700 sq ft.
Important factors in choosing a home – the location
Before purchasing an apartment you must carefully choose the location that suits you best. The residential location can be even more important than the actual apartment in terms of its impact on your life and many of the most important factors that should be taken into account when choosing a home are affected by it.
Therefore, in choosing the correct location you should consider the important day-to-day aspects and needs of your life and look at the neighborhood details, neighbors, synagogues, if you have children then also the distance to appropriate schools/kindergartens and the type of schools, parks and public facilities, cultural centers, public transport or anything else that you might need in your day to day lives.
Important factors in choosing a home – the apartment
Give careful consideration to your needs and your life in general both present and over the period of the next few years. Is your family still growing? How many bedrooms do you need? Does the floor level make a difference to you, do you require an elevator? Do you use a Shabbat elevator? Is view important to you?
Mazal Tov – you have found your apartment!
After finding a property that you like, you may make an offer. Negotiations with the seller over the price is common practice in many cases as are the payment terms and date of possession and your real estate agent will be a great assistance in this regard.
When you have reached agreement with the seller, then a contract for purchasing the property is usually prepared by an attorney of the seller and reviewed by the buyer’s attorney.
Considering the size and length of the financial commitment involved and the fact that it is your home that you are purchasing, it is highly advised not to do this alone, but to make use of the services of professionals whom you can trust and primarily to be accompanied by a lawyer who specializes in real estate.
During the contract negotiation between you and the seller many details will arise such as different guarantees and commitments regarding dates of execution and various deliveries.
With contractors there will also be installation milestones (for the kitchen, bathroom, floor tiles, etc) as well as payment milestones, interest penalties, linkage, compensation for delays in delivery or of taking possession and for changes that are included as well as the technical specification of the apartment etc.
There are also many important legal considerations that must be clarified with respect to the property before any contract is signed. These will differ slightly depending on whether you are purchasing a second hand apartment or a new home from a contractor and include matters relating to rights, registration, permits and attachments. Your attorney should clarify these and give expression to the necessary legal standing of the property as required for your protection in the contract.
Property inspections by a licensed engineer are strongly recommended when purchasing a second hand property before the contract is signed. Inspections are done at your initiative and expense.
The contract is signed – payment and taxes
It is custom in Israel for the price of the property to be paid out over a period of time. For second hand purchases the period is a number of months (usually not exceeding 12 months) connected to milestones such as delivery of certain approvals and documents. For purchases from a contractor, the payments will run over the construction period relating to progress with the building, all depending on the details. When immediate occupancy is required an up-front payment will be required.
Immediately following the purchase of an apartment you are obliged to send a statement to the land tax authority. It is important to send it in time in order to avoid a payment of a fine or interest. When you buy an apartment you must pay purchase tax which is a percentage of the cost of the apartment. Purchase tax varies between half a percent to eight percent and there are conditions, discounts and even exemption in specific cases, for example – the purchase of a first apartment has a different rate to the purchase of a second or additional apartment. These rates also change from time to time based upon government priorities.
Your attorney should take care of filing the necessary notice and for informing you of the tax authorities’ response regarding your payment obligation. Your attorney should also be able to advise you in advance of signing the contract of the taxes that you can expect to pay based upon the relevant information that you provide so that you can take this into account when evaluating the total cost of the purchase for budgeting purposes.
It’s yours – Transfer of title
Transfer of Title takes place after the last payment is made. It is custom to file a “warning: in the land registration office after the contract is signed stating that the property is under sale and cannot be re-sold by the seller. The buyer’s attorney should be responsible for making sure that the change of title takes place after full payment is complete. It is not common but can be negotiated that a small percentage of the purchase price be held in trust by your attorney or the seller’s attorney until the transfer of the title is complete.