The purchase of an apartment in Israel follows a well-established sequence of steps, markedly different from practice in many other countries. Understanding them in advance allows the transaction to be approached with full knowledge of what it entails.

In Israel, buyer and seller are each represented by their own lawyer, whose duty is owed to their client alone.

1. Before you sign anything

A memorandum of understanding (zichron dvarim), a developer's reservation form, or even a sufficiently detailed exchange of messages may already constitute a binding contract. You should consult a lawyer before signing any document or paying any deposit.

This is also the stage at which to settle your financing: your own funds and the bank's approval in principle.

2. Legal due diligence

Before signature, the lawyer verifies that the seller holds title and that no legal impediment stands in the way of the sale:

Land Registry (Tabu) extract, or a rights confirmation from the Israel Land Authority or a housing company where the property is not registered.
Encumbrances: mortgages, liens, third-party caveats, easements.
Municipal building file: permits, irregularities, pending zoning plans.
Consistency between the records and the property itself: area, parking, storage, appurtenant areas.
Debts: municipal tax (arnona), building committee charges, possible levies.

New builds

Where the seller is a developer, the lawyer also reviews the technical specification, the delivery schedule and the statutory security for each payment, usually a bank guarantee or an insurance policy. The developer's contract is a standard form drafted in its favour, and several of its clauses are open to negotiation.

3. Financing

If you are financing the purchase with a mortgage, obtain approval in principle before signing. The contractual payment schedule must align with the bank's disbursement timeline; otherwise late payment may ensue.

4. Negotiating the sale contract

The contract sets out every term of the transaction, including:

price and payment schedule;
handover date and the condition of the property;
each party's security: when funds are released and what secures them;
the consequences of delay or breach by either party;
the allocation of taxes and costs.

5. Signing and the caveat

Shortly after signature, a caveat (he'arat azhara) is registered in the buyer's favour. It safeguards the buyer against any conflicting transaction, such as a double sale or a new mortgage.

6. Reporting to the Tax Authority

Buyer and seller must report the transaction to the Real Estate Taxation office within 30 days. The buyer pays purchase tax on the basis of the self-assessment within 60 days. Where a lawyer represents you, the lawyer files the report online.

The seller may be liable for betterment tax (mas shevach) or qualify for an exemption. See Purchase tax and betterment tax in Israel.

7. Handover and registration

Once the price has been paid in full, the keys are handed over. Registration of ownership in your name requires a tax clearance certificate and a municipal certificate confirming that no debts are outstanding.

Ownership is then registered in your name, concurrently with the bank's mortgage. The file is closed only upon completion of registration.

Buying from abroad

The entire transaction can be conducted remotely under a power of attorney. When executed abroad, it generally requires notarisation with an apostille, or execution at an Israeli consulate. The transfer of funds should be planned well in advance.

Making aliyah?

New immigrants may qualify, subject to conditions, for a reduced purchase tax rate on a purchase made between one year before and seven years after aliyah. This should be verified before signing.

The lawyer's role

Examines the property's legal status before any commitment.
Drafts or reviews the contract and negotiates its terms.
Registers the caveat and files the tax reports within the statutory deadlines.
Oversees the handover and registration until the file is closed.

Buying an Apartment in Israel: Every Step, from Due Diligence to Registration