Summary
- The advertised price is not the total cost: taxes, legal fees and technical costs are added to the contract price.
- Purchase tax (Mas Rechisha): this is the heaviest item. It depends on your tax status: 8% from the first shekel for a non-resident, a reduced scale for a new immigrant (Olé Hadash) under the conditions of the law.
- Buyer's lawyer: essential in practice. Fees are freely negotiated, so ask for them in writing. Never share the developer's lawyer.
- Developer's lawyer fees: the buyer's contribution is regulated by the Sale (Apartments) Law; have the amount checked.
- Other costs: utility connections, handover inspection, mortgage broker: ask the developer or request quotes.
1. Why the Advertised Price Is Never the Final Price
The most common mistake of a foreign buyer is to convert all their savings into shekels and aim for an apartment whose price equals 100% of that sum.
In Israel, as in most countries, tax, legal and technical costs are added to the price stated in the reservation contract. They need to be calculated before you sign.
2. Worked Example: A 3,000,000 ₪ Apartment
Only the lines that can be calculated from the official purchase tax scale appear here. Amounts are rounded to the shekel.
| Item | Non-resident | New immigrant (Olé Hadash) |
|---|---|---|
| Purchase price (contract) | 3,000,000 ₪ | 3,000,000 ₪ |
| Purchase tax (Mas Rechisha) | 240,000 ₪ | 5,106 ₪ |
| Agency fees for the buyer | 0 ₪ | 0 ₪ |
| Other costs (lawyer, utility connections, inspection, mortgage) | quote | quote |
How to read these figures:
- Non-resident: 8% on the full price, because 3,000,000 ₪ is below the ceiling of 6,055,070 ₪ (above it, the upper portion is taxed at 10%). Calculation: 3,000,000 × 8% = 240,000 ₪.
- New immigrant, sole residence: 0% up to 1,978,745 ₪, then 0.5% up to 6,055,070 ₪. Calculation: (3,000,000 − 1,978,745) × 0.5% = 1,021,255 × 0.5% ≈ 5,106 ₪.
- Agency fees: 0 ₪ for the buyer. New Homes Israel is paid by the developer.
Your tax status, household composition and any exceptions must be validated by your lawyer. The olé scale shown is published for a period running until 15 January 2028.
8% rate for non-residents: provided for until 31 December 2026, extended to 10 February 2027 according to the Tax Authority (election period); what follows depends on the legislature and must be confirmed before purchase.
3. Breakdown of Items
A. The Buyer's Lawyer
The contract offered by an Israeli developer is long, written in legal Hebrew, with technical appendices (specifications, plans, building rules for the co-ownership).
- The developer's lawyer does not represent you: they protect the construction company.
- Your own lawyer checks, among other things, the status of the land in the land registry (Tabou), the building permit (Heter Bniya) and the bank guarantees, and negotiates unfavourable clauses.
- Their fees are freely negotiated: ask for them in writing before instructing them.
B. The Developer's Lawyer Fees
Developers often ask the buyer to contribute to the legal costs of the contract. This contribution is regulated by the Sale (Apartments) Law; have your lawyer check the amount requested before you sign.
C. The Technical Inspection at Handover (Badak Bait)
Before signing the handover protocol, it is wise to hire an independent engineer.
- They inspect the apartment and note every visible defect: waterproofing, tiling, installations.
- Their reservations are passed to the developer, who must deal with them as required by law.
- The cost depends on the engineer and the size of the home: request a quote.
D. Utility Connections, Meters and Building Committee
Opening the meters (water, electricity, gas) and setting up the building committee (Vaad Bait) may involve fees. Amounts vary by project: ask the developer, in writing, before reserving.
E. Mortgage Broker
If you finance part of the purchase with a mortgage (Mashkanta), a broker can help you. Their fees are negotiable: request a quote.
F. Warranties After Handover
After the keys are handed over, the developer remains responsible for defects. Warranty periods are set by law depending on the element concerned (1, 2, 3, 4, 5 or 7 years). Have your lawyer confirm the period that applies to each element.
4. How to Keep These Costs Under Control
- Use an intermediary paid by the developer: with New Homes Israel, the buyer pays no agency fees: 0 ₪. The price remains the developer's price.
- Ask for all costs in writing: utility connections, meters, contribution to legal fees. Require a detailed list before reserving.
- Check the date of your tax status: if you are preparing your aliyah, ask your lawyer from what date your status will be taken into account for purchase tax, and coordinate with them the date of registration at the Tabou.
New Homes Israel editorial team.
This guide is for information only: confirm every point with your lawyer and your bank.