Selling an Apartment in Israel Made Easy
Seven Points You Should Consider Before You Sell an Apartment
We at Epstein Law can guide and accompany you through each step.
You have decided to sell your apartment. There are many reasons you might have chosen to do so. Maybe you want to downsize or move to a different neighborhood, or even another city. Whatever your reasons, consider the following seven points before you sell:
1. Registration - Check that your apartment is registered in your name in the appropriate land registration venue (such as the “Land Registration and Settlement of Rights Department” (TABU), or other registration venues). After finding a potential buyer, sellers often discover that their apartment was not properly registered in their name. A prior check can also reveal errors concerning your Identity Number or your incorrectly spelled name. This check can often save you your time and money.
2. Property Tax - Check whether the Property Tax (Mas Shevach) applies on your sale. In Israel, it is the seller who is obligated to pay the Property Tax, even if the contract privately stipulates that the buyer assumes responsibility for paying this tax. Consult an expert lawyer who can both examine your potential liability as well as find a possible exemption or a possible reduction of this tax. This can save you money, as many different rules apply. Some exemptions include apartments that were inherited or larger apartments purchased to replace two smaller ones.
3. Improvement Levy - You, the seller, must check if there is a Municipal Improvement Levy (Heytel Hashbacha) that applies to the apartment you wish to sell. Before selling a ‘second hand’ apartment you should check with the municipality to ascertain whether you, the owner of the apartment, are required to pay this Levy. This Improvement Levy is a form of tax that a municipality charges the seller when as a result of a local planning improvement program the value of your apartment has increased. Proper planning can prevent or mitigate many issues from arising. With the help of an experienced lawyer you might be able to reduce or cancel the Improvement Levy.
4. Memorandum of Understanding - Often, after the parties have reached a mutual decision to buy and sell an apartment, they summarize the terms in a document called a Memorandum of Understanding (Zichron Devarim) this document might include basic information such as the apartment’s price, a schedule of payment, and apartment address. Nevertheless, do not sign a Memorandum of Understanding (Zichron Devarim). In many cases, this seemingly informal document can be considered a legal contract, enforceable in Israeli courts, even if the parties expressly agreed in writing that a real contract would be prepared by an attorney. Insist on a meeting with your real estate attorney who will prepare for you a proper contract that will protect your interests.