Real estate investment in Israel

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Land and Property Laws in Israel

Land and Property laws in Israel refers to the legal framework governing land and property issues in Israel. Following its establishment, Israel designed a system of law that legitimized both a continuation and a consolidation of the nationalisation of land and property, a process that it had begun decades earlier. For the first few years of Israel’s existence, many of the new laws continued to be rooted in earlier Ottoman and British law. These laws were later amended or replaced altogether.
In 1945, about 85% of the arable land in Palestine was owned by Arabs.By 1949, some 700,000 Palestinians had been displaced and/or fled from their lands and villages. Israel was now in control of some 20.5 million dunams (approx. 20 500 km²) of lands in what had been Mandate Palestine. In 1949, only about 8 percent (approx. 1,650 km²) of all the Israeli-controlled lands were Jewish-owned, 6% (approx. 1,300 km²) were Arab-owned, with the balance held under some form of government control.
The first challenge facing Israel was to transform its control over land into legal ownership. This was the motivation underlying the passing of several of the first group of land laws. registration at the regional Land Registry Office.

Check the Property Status

Your real estate attorney should do a title search to verify the present ownership of the property and determine whether there are any outstanding mortgages, liens or other encumbrances. After checking all the relevant documentation in the title search your broker should be able to tell you if there are any issues that might impede the transaction in any way. Your broker should also check the issue of betterment tax and how it affects you.


Arnona is the tax levied on buildings, both commercial and residential by the local municipality. The payments make up approximately 50% of the council’s budget for services and activities that they provide for the town or city.
The Arnona is calculated on the basis of the size of the property, the area in which it is situated and the purpose for which the property is used.

tax shelter

Many people are unaware of the fact that Israel constitutes a tax shelter, and is even considered most suitable for foreign investments in Israeli real estate.
One of the possibilities a foreign investor has is an investment through a Reit fund the purpose of which is the holding and management of belding real estate. Thru the fund, foreign investors can participate indirectly in yielding projects in Israel. In addition to the advantage of participating in this investment, Reit funds enjoy an amendment in the Income tax Ordinance that enables tax payment only on dividend payments, and not on revenues from rent. This is true as long as the Fund distributes 90% or more of the taxable revenues of the Fund as a dividend to its investors.

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