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FAQ - Buying a home in Israel

For those who have ever bought real estate in Israel - it was either the fulfillment of their dreams - owning a piece of Eretz Yisrael - or one of the worst nightmares they have ever had - mortgages, strange customs and terminology, unknowns such as safety of the area etc. We answer some the questions on some of the whys and wherefores of real estate. Call or e-mail us with any of your questions - we are here to dispel the nightmare and fulfill your dream.

Terminology:

People live in a house (Bayit) or an apartment (Dirah) the word "flat" is not (or very rarely) used. Terms are confusing: A "cottage" is a dwelling, on more than one level, attached to another dwelling and with a private entrance. A townhouse is the same as a cottage, but with its own roof. A "villa" is usually a free standing dwelling. A penthouse refers to the top apartment(s) of a building - usually larger than the rest of the apartments in the building and with a large balcony - or roof terrace and more expensive. A "studio" usually refers to a one room apartment. A duplex is any home with two floors.

Size:

Israeli house sizes are usually expressed in square meters, and land is measured in dunams.
       1 sq. foot = 0.093 sq. m.
       1 sq. m. = 10.7 sq. ft
       1 dunam = 1000 square meters = 0.22239 acres = 9700 sq. ft.
       So, if you have half a dunam of land, you have 4850 sq. ft.

The real problem is whether a home is measured gross (brutto) or net (netto) and what is included or excluded in these measurements. Gross is used for comparing properties for sale. This measurement includes the exterior walls and interior walls of the property and a proportion of the common areas in an apartment building (block of flats). Gross is used when calculating building rights however in this case allowances are made by the planning department (for instance sealed rooms are not included). Net square meters is calculated without interior or exterior walls. Net is used by the municipality to calculate the floor area of a property to levy municipality taxes (Arnona). The municipality includes for tax purposes covered balconies over 6 sq.m., 20% of the area of penthouse balconies and 50% of storerooms. Gardens and parking areas are not included.

What does 3½ rooms mean?

Home sizes are also described in terms of the number of rooms - that is bedrooms and living rooms, and not including bathrooms, toilets, laundry, balconies, and kitchens. So, a home with 3 bedrooms, an en-suite bathroom and another bathroom, a separate laundry, a separate kitchen, a living room (salon), and a balcony- would be described as 4 rooms - only the bedrooms and the living room are counted. Balconies which have been enclosed to serve as a room are sometimes counted as rooms! There is also a concept of "half a room" - this could mean a dining area, a part of a hallway which has been converted to a study - the possibilities are almost endless.

Paying:

Finance possibilities include loans and mortgages. For young couples, special mortgages or loans of varying amounts may be available, more generous if you choose to live in a development town, or over the Green Line. If you hold onto the property for a specified minimum time, usually five years, then usually the loan, or at least a large part of it, is changed into a grant. Olim can also get various additional loans and mortgages (for Australians, from the British Olim Society). There are many different types of mortgages - dollar based, shekel based, linked, non linked, available for periods from up to 32 years , and up to about 90% of the property's value, as assessed by a professional valuer or appraiser( usually lower than market value). Bullet loans are also available, where interest only is repaid during the term of the loan, with capital being repaid at the end.

New or second hand?

When buying new , one can buy "on the paper". This means buying from a builder and choosing your home from a plan - it may be long before construction begins. If you buy at this stage, you may have a fair bit of flexibility in terms of the final design/layout and choice of fittings. Most new homes do not have the kitchen fitted in - one is given a certain amount which can be spent on the kitchen, and should a fancier kitchen be your wish, you can then increase the amount to be spent. Housing fairs are held regularly, and there is fierce competition amongst builders to attract buyers of new homes. If buying "on the paper", or buying a house that isn't completed, one needs to clearly understands all the plans and be in a position to closely supervise. We recommend that you employ a supervisor who will ensure you will end up with a well built home. Call one of our recommended surveyors.

Do all homes come with a garage?

Not necessarily. Planning regulations now require builders of new homes to provide between at least one, sometimes two, parking spaces per dwelling unit. These parking spaces can be in an underground car park, in uncovered parking areas within the property's boundaries, or a combination. Some buildings have off-street parking allocated on a first come first served basis which can be frustrating where many families now run two or more cars.

Older homes, particularly in inner city areas, do not have any provisions for parking, necessitating looking for parking on the street- not always easy. In areas where parking restrictions apply the Municipality provides stickers for residents allowing free parking in proximity of their homes.

Do all homes have a separate storage room (machsan)?

Some do, some don't. In many homes, people use the "boidem or intersol" for storage - the area over the bathroom and hallway between the bedrooms with a false ceiling, to allow for storage. Planning regulations allow builders to provide all new homes with individual machsanim.

Can you have a wooden exterior, a brick home- are building materials restricted?

The country has various building codes. The Jerusalem building code requires all buildings to have an external facing of Jerusalem Stone. Some older residential buildings have cement or stucco facings. These buildings were erected when, especially in the 50's, a lot of housing, to be built quickly and cheaply, was needed to house the huge influx of immigrants.

Are "for sale" signs displayed externally to advertise that a property is for sale or rent?

Yes, but this is not very widespread though increasing in popularity. Real Estate agents list properties, and there are extensive real estate sections in all newspapers.

Are properties sold at auction?

Almost never. The usual way is through an agent, or privately.

What does "parents's unit" (Yichidat Horim ) mean? Do all homes have to have a "sealed room"?

This usually means that there is a (somewhat larger) main bedroom with an en-suite bathroom and maybe a walk in dressing room, often slightly removed from the other bedrooms. A "sealed room" (Heder Migun ), is a must in all homes built since the 1991 Gulf War. These rooms have reinforced concrete walls, a special steel door and steel shutter on the window, a TV and phone point, electricity outlets and heating. Older buildings, erected since the early 1970's, were required to have a shelter which could serve all residents of the building. There are also communal shelters (Miklat Tsibori), which are signposted, and serve several buildings.

How high can a building be, without needing an elevator (lift)? Can I install a lift if there isn't one?

Generally, a building with up to 4 floors is not required to have a lift. One can have an anomalous situation where a building of 7-8 storeys is built on a slope, with the entrance to the building at the 4th floor (street) level - so that there are 3 floors below, and 3 floors above - no need (by law, that is) for a lift. However, in newer buildings of three or more floors, lifts are installed. To install a lift, you would need to get approval of two-thirds of the owners and agreement of owners of at least 75% of the dwelling area.

What is central heating (Hasaka Merkazit)? Am I bound to stick with it? What is a "Junkers"?

Central heating means that the building (which contains several apartments) has one large furnace, usually oil ("solar") based, which provides heating, and sometimes hot water, for everyone. If you wish to disconnect from this system and have private heating, it is possible. You are required still to participate in the maintenance and capital costs of the system for the entire building, though are not required to contribute to fuel costs. Private heating can be based on electric convector heaters, or based on a JUNKERS type system - a gas powered furnace. Now that air-conditioning systems are being installed some people are using these systems for heat as well.

If I rent, do I pay municipal rates?

Usually yes. New immigrants are entitled to reductions in rates (Arnona), as are single parent families, large families and pensioners.

When I sell my home, or move out of a rental apartment, can I take my mezuzot?

In the Kitzur Shulchan Aruch, Ch. 11, Para 22 "He who leaves a house and another Jew moves in to live there, the first person may not remove the Mezuzot but must leave them in place, and the second person will pay him for them". You can remove valuable batim (cases) and replace them with cheaper plastic cases, but you cannot remove the mezuzah (klaf) itself. So, if the person moving in is a Jew, (as is very common in the Jewish State) it is your obligation to leave the Mezuzot.

What is Vaad HaBayit?

This refers to the dues levied on all tenants in a communal building - and covers costs of shared lighting, lift maintenance, costs of communal heating and hot water systems, cleaning, gardening, and National Insurance (Bituach Leumi) for the cleaner/s. The amount varies enormously in accord with the type of services provided, and is usually collected on a monthly basis. Major repairs are the financial responsibility of the owners and not of the tenants.

Can I change the outside of my apartment or house - add a balcony, an external staircase or enlarge a window?

In a communal building any external changes must be approved by the owners in the building and by the Planning Department of the municipality. In the case of a detached house, external changes must be approved by the municipality.

Where these changes do not accord with the city master plan (Taba) the immediate neighbours have to be informed and can object. Making a change to the Taba is a lengthy and costly process.

What are "building rights"?

Many years ago, laws were laid down which governed how much of a plot could be built on (usually 75%). Lots of exceptions were made - you could build more on corner blocks, on certain streets , in certain neighbourhoods (trying to increase their amount of residents). In practice, the availability of building rights, because of the potential represented, greatly increases sales prices. The empty block next door might promise quiet and no noisy neighbours - but check the zoning - a shopping centre might go up soon!

How do I know if the sale price quoted is reasonable?

Check with other similar properties in the area. In the final analysis, if it is what you really want, where you want - then paying above market value doesn't really matter - once you have your piece of Eretz Yisrael where and when you wanted it - you'll forget about the few extra shekels or dollars that you paid.

The information contained on this page is a general guide. Prospective purchasers must obtain specific legal and professional advice from qualified Israeli legal counsel or tax advisors. Information provided courtesy of Capital Property Consultants: http://www.property.co.il
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