Facts About Real Estate Market in Israel


Real estate market in Israel is open to both Israelites and non-Jewish foreigners who would like to buy a commercial or non-commercial property in the State of Israel. However, there are two main types of land in Israel and not all real estates are available to foreign, non-Jewish buyers. For that reason it is important to know the differences between different categories of land, especially if you are a foreign citizen.

Only about 7% of Israel’s land is in private possession. Most privately owned land is found in larger urban areas such as Jerusalem, Tel Aviv and Haifa. This type of land can be purchased by anyone including non-Jewish foreign citizens. Due to the fact that there are no restrictions and any additional conditions, this type of land is most sought after and is typically sold to an individual who is willing to pay more regardless of nationality and religion.

The vast majority of land in Israel – 93% is owned by the State. This land, known as the Israeli Land covers the area that was acquired by the State of Israel from the British Mandate after the declaration of independence in 1948. According to the Basic Law, the state-owned land in Israel is owned directly by the State (about 69%), the Jewish National Fund (about 12%) and the Development Authority (about 12%). This land cannot be sold nor purchased but the law allows a long term lease under certain conditions. The land that is owned by the Jewish National Fund for instance, is leased only to Jews. Israeli non-Jewish citizens and foreigners cannot lease land from the Jewish National Fund.

All Israeli citizens regardless of their nationality and religion can lease land that is directly owned by the State and the Development Authority. Under the Law of Return, the land owned by the State and the Development Authority can be also leased by foreign citizens who are Jews. In some cases, the land owned by the Development Authority can be leased by non-Jewish foreigners. Foreign companies, investors and non-profit organizations generally have no problems receiving the right to lease land from the Development Authority, especially in the so-called development areas which are a part of the government’s plan to encourage industrial development. Companies that are willing to invest or transfer their factories to the development areas may be entitled to tax incentives, development grants and a number of other benefits.

It is, of course, a major difference if the land is in your private possession or in lease but it is also worth to consider a lease. However, if you are a foreign citizen interested in real estate in Israel, you are highly recommended to take yourself some time to inform yourself about your options. It may be also a good idea to hire a real estate agent who will not only help you find the best type of property and location but will also explain to you how the real estate market in Israel works, the length of the purchase/lease process, fees and taxes, etc.