Closing Costs & Fees When Buying Property in Israel
The purchase price is just the beginning. Between purchase tax, lawyer fees, agent commissions, insurance, and registration, the true cost of buying property in Israel is typically 8-12% above the sticker price. This guide breaks down every cost so you can budget accurately.
8-12%
Total Additional Costs
Above purchase price
8%
Foreign Buyer Tax
Mas rechisha from first shekel
60 Days
Tax Payment Deadline
From signing the contract
Complete Cost Breakdown
Here is every cost you should budget for when buying property in Israel. Some apply to all buyers; others depend on your residency status and the type of property.
Mas Rechisha (Purchase Tax)
0-8% of purchase priceThe largest closing cost by far. Rates depend on your residency status and whether this is your first property. Israeli residents buying a first apartment enjoy low rates with a tax-free threshold up to approximately 1,978,000 NIS. Foreign residents and investors pay a flat 8% from the first shekel. Olim chadashim get reduced rates between these two extremes.
Progressive brackets for Israeli residents; flat 8% for foreign buyers. Due within 60 days of signing.
Real Estate Lawyer (Orech Din)
0.5-1.5% + VATYour lawyer handles due diligence on the property, reviews and negotiates the purchase contract, files the mas rechisha declaration, registers the transaction at the Tabu, and coordinates with the bank on the mortgage lien. Fees vary.
Some lawyers charge a flat fee; others a percentage. Always clarify VAT and what is included.
Real Estate Agent Commission (Tivooch)
2% + VAT (each side)If you use a real estate agent (metavech), expect to pay 2% of the purchase price plus 18% VAT. Both buyer and seller typically pay their own agents. In some transactions, there is room to negotiate the commission, especially on higher-value properties. If you find the property yourself without an agent, you avoid this cost entirely.
Only applies if you use an agent. Negotiable on premium properties.
Property Appraisal (Shuma / Shammai)
1,500-2,500 NISThe bank requires an independent property appraisal before approving your mortgage. The appraiser (shammai) visits the property, evaluates its condition and market value, and produces a report. You pay for the appraisal, and the bank selects the appraiser. If you apply to multiple banks, each may require its own appraisal.
Paid by the buyer. Each bank may require a separate appraisal.
Tabu Registration (Agrat Rishum)
~160 NISA nominal fee to register the property transfer and mortgage lien at the Land Registry (Tabu). This is one of the smallest closing costs but a necessary legal step. Your lawyer handles the registration.
Standard fee set by the government.
Mortgage Insurance, Life (Bituach Chaim)
Varies by age/healthMandatory for all Israeli mortgages. Life insurance covers the outstanding mortgage balance if the borrower passes away. Premiums depend on the borrower's age, health status, and the loan amount. You can purchase through the bank or shop for cheaper rates with external insurance providers.
Monthly cost for the life of the mortgage. Shopping externally often saves 30-50%.
Mortgage Insurance, Structural (Bituach Mivne)
~500-1,500 NIS/yearAlso mandatory. Structural insurance covers the physical building against fire, earthquake, flooding, and other damage. This protects the bank's collateral. Premiums depend on the property size and construction type. Can be purchased through the bank or externally.
Annual cost. Usually cheaper than life insurance.
Notary Fees (if applicable)
~1,000-3,000 NISNotary fees apply in certain situations, particularly when one or both parties are signing documents abroad, or when a power of attorney is needed. If you are a foreign buyer signing from overseas, you will likely need notary services for document authentication.
Mainly relevant for foreign buyers signing from abroad.
Construction Input Index (Madad Tsumin, New Builds Only)
Varies with inflationWhen buying from a developer (kablan), your remaining payments are typically linked to the construction input index (madad tsumin). This index tracks the cost of building materials and labor. If the index rises between the contract date and your payment dates, you pay the difference. In high-inflation environments, this can add 5-10% or more to the final price.
Only applies to new construction. Can be substantial in inflationary periods.
Worked Example: Buying a 2,500,000 NIS Apartment
Let us walk through the total cost of purchasing a typical 2,500,000 NIS apartment for two different buyer profiles.
Scenario A: Israeli Resident, First Apartment
An Israeli resident purchasing their sole apartment (dira yechida) for 2,500,000 NIS.
| Cost Item | Estimated Amount |
|---|---|
| Purchase price | 2,500,000 NIS |
| Mas rechisha | ~19,000 NIS |
| Lawyer (1% + VAT) | ~29,500 NIS |
| Agent commission (2% + VAT) | ~58,500 NIS |
| Property appraisal | ~2,000 NIS |
| Tabu registration | ~160 NIS |
| Insurance (first year estimate) | ~5,000 NIS |
| Total closing costs | ~114,000 NIS |
| Total cost of purchase | ~2,614,000 NIS |
Closing costs represent approximately 4.6% above the purchase price.
Scenario B: Foreign Buyer
A non-resident purchasing the same 2,500,000 NIS apartment.
| Cost Item | Estimated Amount |
|---|---|
| Purchase price | 2,500,000 NIS |
| Mas rechisha (8%) | ~200,000 NIS |
| Lawyer (1% + VAT) | ~29,500 NIS |
| Agent commission (2% + VAT) | ~58,500 NIS |
| Property appraisal | ~2,000 NIS |
| Tabu registration | ~160 NIS |
| Notary fees | ~2,000 NIS |
| Insurance (first year estimate) | ~5,000 NIS |
| Total closing costs | ~297,000 NIS |
| Total cost of purchase | ~2,797,000 NIS |
Closing costs represent approximately 11.9% above the purchase price, driven primarily by the 8% mas rechisha.
Important Notes
Closing Costs Are Not Financed by the Mortgage
Your mortgage covers part of the purchase price only. All closing costs, mas rechisha, lawyer, agent, appraisal, insurance, must be paid from your own funds. Make sure your savings cover both the down payment AND the closing costs.
No Agent? Significant Savings
If you find a property without using a real estate agent, you save the 2% + VAT commission, approximately 58,500 NIS on a 2.5M property. Many buyers in Israel find properties through Yad2, Madlan, or personal networks without an agent.
New Construction Additional Costs
If you are buying from a developer (kablan), factor in the construction input index (madad tsumin). This can add significant cost, especially for off-plan purchases where the building is still under construction. See our New Construction vs. Resale guide for details.
How to Reduce Your Closing Costs
Make aliyah before purchasing
If you are considering aliyah, doing so before buying property can reduce your mas rechisha from 8% (foreign rate) to the significantly lower olim rate. On a 2.5M property, this alone can save you over 150,000 NIS.
Negotiate lawyer and agent fees
Both lawyer fees and agent commissions are negotiable, especially on higher-value properties. Do not accept the first quote, shop around and negotiate.
Shop for insurance externally
Banks offer their own mortgage insurance policies, but external providers almost always offer lower premiums. Over a 20-25 year mortgage, the savings can be substantial.
Find property without an agent
Using platforms like Yad2, Madlan, or personal referrals can eliminate the 2% + VAT buyer's agent commission entirely.
Need a Personalized Cost Estimate?
Every property purchase is different. I will give you a detailed, personalized breakdown of all costs for your specific situation, so there are no surprises when it is time to close.