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Important concepts in real estate

Purchase tax

Purchase tax is a tax paid on the acquisition of a right in real estate under the Real Estate Taxation (Praise and purchase) Law, 1963. The tax is collected for real estate properties such as residential apartments, plots in various designations and structures in various designations. The buyer bears the purchase tax at a fixed rate of the value of the property, and in some cases (for example a single residential apartment) at tiered rates. The purchase tax is paid to the tax authority (real estate taxation). 

 

טריגו השקעות נדל"ן

Purchase tax on land

Tax rate – 6% of the purchase amount. 

Land purchase tax will be levied on any purchase of land or a right in real estate that is not defined as an apartment. 

Did you know

% 1
For a part worth up to

NIS 1,744,505 – no tax will be paid

% 1
For a part whose value exceeds

NIS 1,744,505 and up to NIS 2,069,205 

% 1
For a part whose value exceeds

NIS 2,069,205 and up to NIS 5,338,290

% 3
For a part whose value exceeds

NIS 5,338,290 and up to NIS 17,794,305

Tax rates on the purchase of an additional residential apartment

% 5
For a part whose value exceeds

NIS 17,794,305

% 3
or the part of the value that exceeds

NIS 5,340,425

% 5
On the part of the value up to

NIS 5,340,425

What is a Betterment Tax

Did you know?

Betterment Tax is calculated when selling an apartment or a right in real estate, and it refers to the capital gain generated as a result of the sale. In practice, the betterment is the difference between the sale price and the purchase price with indexation and after offsetting the purchase and Betterment expenses of the property (Such as attorney’s fees for the purchase transaction, brokerage fees, renovation costs, purchase tax, fees and taxes, expenses on the mortgage interest, depreciation and more). Tax rate – 25% of the net betterment generated at the time of sale. 

Exemption from Betterment Tax

Eligible residential apartment

a single residential apartment that has been held for at least 18 months from the date it was delivered. The exemption is up to the amount of NIS 4,500,000. 

Inheritance apartment

provided that the heir is a descendant (son / daughter / grandson) of the testator and in addition, the testator did not have more than one residential apartment on the day of his death, and if he was still alive and sold the residential apartment, he was exempt from betterment tax at the time of sale. 

Selling two apartments

and buying one apartment in their placeThe value of the new apartment must be at least 75% of the value of the two apartments sold. The total price of the two apartments must be up to NIS 2,000,000, when above this amount the exemption granted is relative to the differenceAs for the second apartment sold only, up to a total of NIS 3.33 million, when above it no exemption is given at all.  

When there is no consideration in the sale transaction

the transfer of property without consideration usually takes place in situations of granting an apartment as a gift to a relative, in accordance with the terms of the law. 

Tel Aviv 5000

Is a comprehensive local master plan that applies to the entire area of ​​Tel Aviv, the purpose of this plan is to outline the long-term urban planning policy. The plan determines which areas in the city will be designated for residential, employment, commercial, public uses or other land uses. The plan also includes provisions in transportation and environmental aspects that have an impact on the physical development of the city. The master plan sets out general provisions that will guide the preparation of partial local master plans and new detailed plans. 

Did you know

What do Oslo and Kfar Saba have in common

Both are members of the ICLEI organization, an international organization for sustainable cities 

Kfar Saba is a green city in which the lifestyle allows its residents a high quality of life, the city operates in accordance with the ten principles of sustainable city“. 

Love Kfar Saba?

Come and purchase a land unit in the North Ben Yehuda complex 

The land is not available for construction 

Herzliya Pituach Industrial Zone

649 dunams

Modern office towers

Over 100 cafes and restaurants

International companies, banks and embassies

1,500 companies

Two hotels in the planning

Green roofs

A green roof is a nickname for roofs that are covered in whole or in part by various plants or crops. The substrate is placed on top of the sealing system, in which a variety of vegetation is planted. A green roof will usually include infrastructures such as a roof waterproofing system, root block sheets, waterproofing and root block protection systems, drainage systems and filter sheets.  

Green roofs have many advantages, including reducing the building’s energy consumption and reducing air pollution. 

Luxury car showrooms

What is a comprehensive master plan?

A comprehensive master plan defines the overall planning policy of any authority, and at the same time forms the basis for detailed planning derived from it. An overall master plan is under the authority of the local committee, after approval of the plan by the planning institutions, the local committee will be entitled to have the full planning powers, promote and approve local master plans and detailed plans, consistent with the master plan. 

What is a master plan or a detailed plan?

master plan is the planning of a governmental or municipal authority for a particular area, which includes the physical, economic, social and cultural planning of an area. 

The master plan consists of a blueprint and bylaws.

The blueprint is the graphic part and the bylaws complete the blueprint with detailed instructions regarding land uses

The master plan contains detailed planning

for the area made in accordance with the planning policy outlined by the overall master plan.

What are consolidation and division (parceling)?

Consolidation and / or division is a new application of a detailed plan or local master plan. As part of the procedure, adjacent plots are consolidated and divided in accordance with the new plan in order to enable the development of the area and its maximum utilization for the welfare of the landowners and for the benefit of the public. 

Concepts we did not know

a transaction in which a holder of real estate rights sells to the developer part of the land he owns in exchange for receiving units that the developer builds. 

a forced government act that leads to the transfer of ownership of the land from private individuals to the state. The transfer of ownership is made for a public purpose in exchange for the payment of compensation (unless it is an expropriation exempt from the payment of compensation). 

uncertainty in property ownership. That is, when there is one property belonging to a large number of partners and there is no definition of what is the specific part of each of the owners. 

Physical construction plan. The program is called Gramoshka because it is folded similar to the fold of an Accordion

supplementing equity to receive financial support from the bank. This option allows the entrepreneur to raise capital, in addition to the capital he has at the beginning of the project, so that he can receive full financial support from the bank. 

What is an Improvement levy?

A municipal tax levied by a local committee and which results from an improvement that is the result of an increase in the value of real estate due to the approval of the plan, the provision of relief or the permitting of excessive use by the local authority. The levy is paid at the time of “realization” as defined in the law. The amount of the improvement is determined by an appraiser and the property owner has the right to file a counter-assessment. 

The rate of the improvement levy as of today is 50% of the level of improvement. 

What is Vatmal?

The National Committee for the Planning and Construction of Preferred Housing Complexes is a planning committee whose goal is to increase the supply of housing in Israel.

What is Real Property?

According to the Real Estate Law, there are five types of rights in real estate: 

Ownership

the most powerful right. Under this right a landowner can carry out any kind of legal transaction in it, without the consent of another party.  

Rent-

the right to hold real estate against payment of consideration. The existence of the right is conducted through a lease agreement that defines the relationship between the parties.  

Mortgage-

a lien of real estate, for the benefit of another party, in order to secure his rights. Mortgage is usually registered to secure repayment of a loan given to the landlord.

Easement

The right to use real estate for a specific purpose, without holding it exclusively. Terms of Easement are met by agreement between the parties.

Right of way (real estate)

A right of way, in property law, is a right in real estate that gives its owner priority in the event of the sale of a right in the property. That is, when an owner of an existing right in the property (such as the owner of the property) wants to sell his right, he must offer the right to the owner of the right of first refusal, before offering it to any other person. 

Did you know

The above content is intended to expand the user’s personal knowledge and should not be seen as a substitute for consulting a professional. 

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