Whenever you buy or sell
real estate in israel, there are costs to be considered. Not just the selling price which you will either pay or receive, but also taxes and other fees which you have to take into account.
On the sale of property in Israel, there is a purchase tax which must be paid by the buyer in a property transaction. This tax is between 3.5% and 5% of the total purchase price of the property. Those who are residents of Israel, however, will pay .5% less if they only own one property.
If there is a couple where one already owns a piece of property, one partner will have to pay the higher purchase tax rate. If a property transaction takes place between family members, then the purchase tax is assessed at only one third the standard rate.
Another tax to be paid is the Sales Tax. This has to be paid by the seller, and its rate is 2.5% of the value of the sale or 0.8% of the sale of a residential property by a building contractor. In many cases, if the seller is a private individual, and not a company, there is no charge of sales tax.
Israel Real estate agents will also have to be paid a commission from both buyer and seller. A skilled real estate agent, however, can save you far more money on the sale than you will need to pay them in fees. Their knowledge of the market and applicable laws can be a real money saver. The broker's fee is usually around 2% of the purchase price, payable upon sale. In the case of a lease, there is a VAT of one month's rent which will need to be paid along with the VAT (17%). This commission must be paid at the time of signing the lease or sale agreement.
Real estate lawyers have a fee of 1.5% plus VAT when buying a first-hand property from a contractor. This will go to the contractor's lawyer for legal fees. When you buy a property not first hand the lawyer on your behalf will take between 0.5% and 1% plus VAT.
If you chose to bring a property inspection engineer to see the property before making the purchase (this is mostly advised when buying a used property) you will have to pay an additional fee of 400$-500$ plus VAT, but this changes according to the size of the property.
When purchasing a property in Israel the payments are usually made in Israeli Shekels (NIS) and not in Dollars, Euros, etc. When converting money to Shekels, the bank usually charges a fee: between 0.1% and 0.5% of the amount that is being converted.
Article Source: http://www.alltopinfo.com
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