Acquiring rights in Israeli real estate for foreign citizens

Our office previously explained the difficulties involved in acquiring rights to real estate in Israel for foreign citizens. Most of the land outside the major cities (mainly Tel Aviv and Jerusalem) belongs to the state. In most cases, it is easier for a foreign citizen to purchase an apartment or house but not the land on which it stands, or to let an Israeli company purchase the land on the foreign citizen’s behalf and dictate its use through said company. But under what conditions can a foreign citizen purchase (or rent for a period of more than 5 years) land in Israel, particularly land that is not private?

The Israeli real estate market is a profitable and stable investment route, mainly due to the housing shortage in large cities and the constant increase in real estate prices. However, for both political and economic reasons, the investment options for foreign citizens in Israeli real estate are limited.

Any foreigner may, as an individual but not as a company, buy a single apartment (or “residential unit”) in Israel. This singular purchase will not allow for large scale trading in real estate or actively renting out several apartments. On the other hand, this does help to create a problem of “ghost apartments“. Conversely, a foreigner does not have the right to purchase even a singular plot of state owned land without special permission.

In this article, you will get a detailed explanation of the conditions for the purchase of Israeli real estate for foreign citizens, by an attorney from our law office, which specializes in immigration issues and helping foreign citizens to invest in Israel, including in the field of Israeli real estate.

What’s a “foreign citizen”?

This may seem like an obvious question – surely a foreign citizen is someone who is not an Israeli citizen. But if we delve into the language of Israel’s Land Law, we find that a foreign citizen is defined as someone who is not a citizen or resident of Israel – permanent residents can purchase land like any other Israeli – and furthermore, who is not entitled to aliyah according to the Law of Return.

Those eligible for aliyah receive Israeli citizenship immediately after confirmation of eligibility and arrival in Israel. But the real estate law favors them and allows them to purchase real estate without exercising their right to aliyah.

Thus, a person entitled to aliyah who is in Israel as a tourist, as a holder of an A1 visa for those entitled to aliyah, or of any other visa, may purchase real estate in Israel.

It is even possible to start the land purchase procedure while the buyer is abroad, although the procedure will be more complicated, and may cost more (see our article on purchasing an apartment for foreign residents for more details).

As mentioned above, even a corporation or company controlled by or acting on behalf of Israelis or entitled to Shabbat can purchase real estate, even if the company receives instructions from a foreign citizen or company.

Can a foreigner purchase real estate in Israel directly?

So Israelis and those entitled to make Aliyah can purchase land, even for the use of a foreign citizen. But can the foreigner purchase Israeli real estate directly?

Yes, subject to a large number of approvals – from the chairman of the Israel Lands Council (on the recommendation of a subcommittee of the Israel Lands Council) and after consultation with the Minister of Defense and the Minister of Foreign Affairs.

Obtaining the approval involves considerations of the public good and its safety, characteristics, size, location and purpose of the land that the foreigner wishes to buy, the foreigner’s affinity to Israel, and more. A specific case is foreign institutions that have ties to religious organizations that seek to buy land in Israel

In this case, the land manager will request the opinion of the ministers of religion, education, culture, security, law, and foreign affairs, depending on the land’s designation (for example, the minister of industry regarding land designated for commerce, industry, or craft, the minister of tourism for land designated for building a hotel).

Which lands cannot a foreigner purchase in any case?

Lands used for agriculture and lands reserved for security or strategic needs. While land used for agricultural purposes is usually clearly used in this manner – plowed fields, orchards, etc. – land used for security purposes does not necessarily have a military base or a nuclear reactor on it. It makes sense to check the classification of the land before starting the activity to purchase it.

Contact an expert real estate attorney

As you can see, purchasing rights in real estate for foreign citizens is even more complicated than a regular real estate transaction. If you want to buy or sell real estate in the Holy Land, contact a real estate lawyer from our office. The office has branches in Jerusalem and Tel Aviv, the employees of the office speak a variety of languages, including English, French, Russian and German, and we will be happy to assist in all stages of a land purchase in Israel.

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03-3724722

055-9781688

office@lawoffice.org.il