Properties for Sale

Israel Property News
 

ELUL 5774, SEPTEMBER 2014

NEWS

* WE MOVED OUR OFFICE AND WE ARE NOW LOCATED IN THE INBAL HOTEL LOBBY NEAR THE BUSINESS CENTER.

COME VISIT!!

** The Knesset has approved a number of significant changes to the taxation on the purchase and sale of land and property, and the capital gains tax in Israel We advise that you consult with an experienced  Israeli real estate attorney and/or an Israeli tax accountant.

PRESALE: Classy New Project #1130

Our office has received a  SPECIAL PRESALE on 20 apartments of 2, 3 & 4 bedrooms. 

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BE PART OF BUILDING A NEW CITY IN ISRAEL. 

3 Bedrooms f0r NIS 790,000  #1199

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NEW PROJECT - Jerusalem Suburb

Private Villa Lots With Jerusalem View #1171
10 minute drive to the center of Jerusalem. Build 500+ sqm on a choice double lot.

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JERUSALEM

Ideal Starter Apartment  #1157

Great apartment, cleverly renovated to provide comfortable living space, including a work area, and ample cabinet & closet space.

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Unique and Beautiful #1120
Looking for that SPECIAL UNIQUE property?

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Garden Apartment in Prime Neighborhood # 1031
Private entrance & a registered 120 sqm garden.
Beautifully renovated garden apartment. 

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Cottage With A Pool & Sauna  #1168
Located close to Talbieh and Emek Refaim.
A truly beautiful and comfortable home for the special family!

 

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 CHECK OUT OUR LONGTERM RENTALS!

Seller Beware

By Barry D. Ernstoff, Advocate

In purchasing an apartment the slogan is "Buyer Beware." In selling an apartment "Seller Beware" is no less important. Below are some of the issues regarding which a seller of an apartment in Israel should be concerned.
 
1.   Capital Gains Tax (mas shevach) — Israel has a capital gains tax on the sale of real property. The rate of tax varies depending on when the property was purchased, ranging from 50% down to 20%. There are several kinds of exemptions from the tax for residential apartments. A seller who has not owned two residential apartments at the same time for the past four years enjoys a full exemption from the tax. A seller who owned two residential apartments and sold one with a tax exemption must wait four years from the date of sale to sell a second apartment with the exemption. There is an additional exemption for certain family members who inherit an apartment provided that the decedent owned only one residential apartment at the date of death and would have been entitled to an exemption if he or she were selling the apartment. There are other tax issues in the case of an apartment received as a gift. One must be careful to check the tax issues before deciding to sell.
 
2.   Betterment Assessment (hetel hashbacha) — If, since the seller purchased the apartment, the planning authorities adopted a new zoning plan allowing greater use of the property or additional building rights, or if the seller submitted a request and was granted additional building rights or other benefits affecting the value of the apartment, the seller may well owe the municipality Betterment Assessment, which is payable by the seller at the time of sale. The Assessment is in an amount equal to 50% of the increase in value of the property arising from the planning authorities' action. Many sellers are not aware of the Assessment until after they have signed sales contracts, and then it is too late. There are other municipal assessments, such as for new sidewalks, roads, sewers etc., which may  have to be paid by the seller in order to carry out the sale.
 
3.   Registration — Sometimes an apartment owner, when he or she wishes to sell, discovers difficulties or errors with the original registration in the seller's name in the Land Registry. It can take a great deal of time and money to solve these issues. Immediately upon contemplating sale of a property, the registration of the ownership should be checked by an abstract of title ordered from the Land Registry. It is also wise to order the file of the entire condominium building to see the organic documents of the building — which can take up to a week — so that a potential buyer does not have to wait and perhaps have his or her enthusiasm cool down.
 
4.   Seller's Declarations — The usual sale contract contains declarations by the seller regarding the condition of the apartment, for example, that the apartment contains no illegal building or that the seller does not know of any defects in the apartment, such as water leaks etc. If, for example, a porch was enclosed without a building permit (even by a previous owner), or the seller in fact knows of a defect in the apartment, it should be revealed in marketing the property — to the seller's broker and to potential buyers — and declared in the contract of sale, or the buyer may have a cause of action against the seller if the seller's declarations are not true.
 
5.   Title — Title to property in Israel can be complicated. The ownership of much of the property in Israel is by long term leasehold, with the actual title held by the State of Israel or other parties such as the Catholic, Greek Orthodox or Russian Orthodox Church. This is particularly true in Jerusalem. The State of Israel owns much of the land — or the State leases it from the Churches — and leases or subleases it to apartment owners by 49-year leases with a right of renewal. In some of these leases — whether directly from the State or from the Church by way of the State — the rent for the full lease term was paid at the beginning, so there is no lease payment to be made by the leaseholders. In other leases — also whether directly from the State or from the Church by way of the State — annual rental is paid, and in such cases a sale of the apartment will trigger a payment to the State representing a portion of the profit on the sale ("d'mei haskama").  There is a new policy of converting these leases into private title, but this will take many years, Most of the Church leases expire between 2031 and 2051, and no one knows what will happen then. Therefore the nature of the title to a seller's apartment can affect its salability and price.
  
Adv. Barry D. Ernstoff is a partner in the Jerusalem firm Wine, Misheiker & Ernstoff. He has been practicing in the areas of property law, estates and commercial matters in Jerusalem for 23 years, having been a partner in a Seattle law firm before his aliyah. He can be reached at ernstoff@winemelaw.co.il
 
 
 

 

 

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