Real Estate

A significant portion of rights registered in respect of residential apartments in Israel are found at the Land Registry Office in the area in which the apartment is located. The registration of the apartment can be reviewed by obtaining a land registry extract of the apartment from the Land Registry Office. The extract specifies details relating to the apartment that are recorded in the Land Register.
The extract specifies the block, parcel and sub-parcel of the apartment. It states the size of the apartment at the time that the apartment was registered, the attachments to the apartment (such as a roof, storeroom, parking, etc.) and the share of the apartment in the apartment building.
The extract specifies the owners / holders of rights in the apartment, as well as the holders of other rights in the apartment (mortgage holder, easement holder, etc.) as well as various notes relating to the apartment, such as a caveat in favor of any third party or a lien imposed by a creditor, etc.

According to Israeli law, a real estate transaction requires a written instrument. Therefore, the purchase of an apartment necessitates a written agreement between the parties to the transaction. The agreement needs to include a number of significant details to comply with the writing requirement. In order for the written document to be binding, it must contain, inter alia, the following details: names of the parties to the transaction, precise details of the apartment, transaction price, terms of payment, delivery date and, of course, the signature of the parties to indicate their consent to the agreement.
It is, of course, desirable to prepare a clear and detailed agreement containing most of the terms that are acceptable at the time of preparing the sale agreement.

Upon preparing the agreement for purchasing the apartment, the parties need to report to the land taxation authorities as soon as possible regarding the transaction, since the purchaser’s rights in the apartment cannot be registered without issuing tax approvals.
The accepted approvals consist of confirmation of payment of purchase tax and betterment tax.

The purchaser is required to pay purchase tax when acquiring an apartment. The amount of tax varies according to the value of the apartment and the number of apartments owned by the purchaser. AN Israeli resident who acquires his first apartment shall be required to pay reduced purchase tax.

A tax that is normally imposed on the seller of an apartment. There are a number of exemptions under law, which, in some cases, exempt the seller from the payment of betterment tax.

After choosing an apartment and signing the agreement, a caveat should be registered at the Land Registry Office regarding the purchaser’s rights in the apartment.
A caveat is a note registered on the seller’s rights in the apartment and constitutes a warning regarding the purchaser’s rights in the apartment. Any third party can easily learn of the purchaser’s rights in the apartment by reviewing the land extract of the apartment.

When the transaction progresses towards registration of the purchasers as owners of the apartment, the execution of the sale transaction needs to be reported to the municipality / local authority since one of the documents required for registration of ownership in the name of the purchaser is a “municipality approval for the Land Registry Office”.
The “municipality approval for the Land Registry Office” is an approval issued by the municipality / local authority, in which the municipality confirms that it does not oppose the apartment being registered in the name of the purchaser. The municipality usually issues this approval only after all of the debts on the apartment have been paid to it and, in many cases, the municipality demands that also property tax is paid to it in advance.

Upon receipt of all of the required approvals: confirmation of payment of purchase tax, confirmation of payment of betterment tax, and the municipality approval for the Land Registry Office, the apartment may be registered in the purchaser’s name.
The purchaser needs to provide the Land Registry Office with all of the said approvals, together with a bill of sale (number of copies).
The Land Registrar will review the transaction and the approvals and will then sign the bill of sale and thus approve execution of the transaction and registration of ownership in the name of the purchaser.