How a Chabad Investor Can Buy Property in Israel: Step-by-Step Guide (569)

Foreign investors from the Chabad organization are increasingly interested in Israeli real estate, especially in Haifa. This guide will help you understand how to safely and effectively purchase property, the legal and tax considerations to keep in mind, and the steps needed for a successful investment.

1. Understanding the Legal Status of Foreigners

• Foreigners can purchase property in Israel on private land.
• Citizenship or residency is not required, but you need an Israeli Tax ID.
• The property must be on private land, not on state-owned or special lands (e.g., JNF land), which may have restrictions.

2. Choosing a Reliable Agent and Lawyer

• Find a trusted real estate agent experienced with foreign investors.
• Establish a Power of Attorney with a lawyer to complete the transaction remotely.
• The lawyer will verify property ownership, encumbrances, and the legality of the deal.

3. Selecting the Neighborhood and Property Type

• Choose a neighborhood based on your investment goal: rental income or capital growth.
• Haifa offers stable demand for 1–3 room apartments suitable for families and professionals.
• Check transport accessibility, local infrastructure, and proximity to Chabad community centers.

4. Financial Planning

• Calculate the total purchase cost, taxes, commissions, and additional fees:
  • Purchase Tax (Mas Rechisha): ~5–10% depending on the property price.
  • Agent and lawyer fees: usually 3–5% of the purchase price.
  • Additional costs: registration, notary.
• For mortgages, foreigners usually need a down payment of at least 50%.

5. Taxes After Purchase

• Rental income is taxed in Israel, even for foreign investors.
• Capital gains tax applies on sale, depending on ownership period and property type.
• A lawyer or tax consultant can help optimize the tax burden.

6. Practical Checklist

1. Verify the legal status of the land.
2. Check the condition of the building and apartment.
3. Evaluate the neighborhood: infrastructure, transportation, safety.
4. Calculate total costs, including taxes and fees.
5. Ensure the property meets Chabad community needs (proximity to synagogues and community centers).

7. Tips from Unehasim

• Use a trusted real estate agency and lawyer for a safe transaction.
• Focus on 1–3 room apartments, which are easier to rent out.
• Plan your budget including all additional costs and taxes.
• Keep track of new projects and infrastructure improvements in the chosen area.

Looking to safely invest in Israeli real estate? Unehasim can help you find properties tailored to your goals, budget, and the specific needs of the Chabad community.