Can a Foreign Resident Buy Property in Israel?
Yes — Israel generally permits foreign nationals and non-residents to purchase real estate. There are no blanket ownership restrictions based on nationality for most property types. However, several legal and tax differences apply compared to Israeli residents.
Higher Purchase Tax
Foreign residents are not entitled to the first-home purchase tax exemption brackets available to Israeli residents. They are automatically classified as "owners of an additional apartment" for purchase tax purposes, meaning rates of 8–10% apply from the first shekel. This significantly increases transaction costs.
Currency and Reporting Requirements
Funds transferred from abroad for Israeli property purchases must be properly documented and declared to the Bank of Israel and the Israel Tax Authority. Failure to properly declare foreign-sourced funds can result in tax investigations. Working with a real estate attorney who coordinates with a tax adviser from the outset is essential for foreign buyers.
What purchase tax does a foreign resident pay when buying an apartment in Israel?
Foreign residents buying property in Israel pay purchase tax at the higher "second apartment" rates — currently 8% on the full value with no exempt bracket. They cannot claim the first-home exemption tiers available to Israeli residents. This means a foreign buyer purchasing a 3-million-shekel apartment will pay approximately 240,000 NIS in purchase tax.
