Completion Time Frame: 1 day (simultaneous with procedures 2 and 3)
Completion Costs: NIS 60
Points to Note:
In order to verify that the property is registered in the name of the seller and that no other rights of any kind of third parties are registered, the buyer obtains a land registration extract relating to the property from the regional land registry office. It is possible to retrieve an extract online (costing approximately NIS 15) but this would not be a legally binding paper.

Step 2: Check the Municipality record relating to the property

Completion Time Frame: 1 day (simultaneous with procedures 1 and 3)
Completion Costs: NIS 162
Points to Note:
The Municipality records show the building rights relating to the property, and can indicate whether the building was constructed according to the applicable building permits, whether there are any legal proceedings relating to the construction and use of the building, etc.

Step 3: File a report on the transaction with the tax authorities

Completion Time Frame: 1 day (simultaneous with procedure 1 and 2)
Completion Costs: no cost
Points to Note:
After the sale agreement has been prepared and signed by the parties, they have 50 days to file a report on the transaction based on self-assessment with the tax authorities. Following the filing of the report on the transaction a voucher based on the self assessment will be sent by the tax authority. Usually the self-assessment is prepared by the company’s lawyers and accountants and the report on the transaction is filed by the lawyer that handles the transaction.
It is possible, though less common, to file a report on the transaction without self-assessment (a “Regular Statement”). In that case the parties have 30 days to file a report on the transaction and the tax will be paid within the time provided in the voucher for payment received from the tax authority (the voucher is received within 45 days from the filing of the report).

Step 4: Pay taxes at a commercial bank

Completion Time Frame: 1 day
Completion Costs: 5% of purchase price (Purchase Tax) + 2.5% of purchase price (Sale Tax) + up to 25-31% of capital gains tax on real-property (Land Betterment Tax)
Points to Note:
After filing a report on the transaction with the relevant tax authorities, the following taxes, based on self-assessments, must be paid:
Land Betterment Tax (capital gains tax on real-estate) – paid by the seller on the difference between the purchase price and the original purchase price paid by the buyer in the current transaction (” the Land Betterment”). Please note that when the seller is a company, the payment of the Land Betterment Tax will only serve as an advance payment on account of the general company taxes paid by the company. The tax is up to 25 – 31% for companies.
Purchase Tax – paid by the purchaser
Sale Tax – paid by the seller
Consent Fees – when a capitalized sum of the periodic contractual lease payments under 49 Year Lease has not been paid, in addition to the aforesaid taxes, Consent Fees should be paid to the Israel Lands Administration. The rate of Consent Fees payable varies based on the value of the property. The whole procedure relating to Consent Fees may take a few weeks.

Step 5: Obtain the Tax Authorities Certificates confirming tax payments for registration of the transfer of title at the Land Registry

Completion Time Frame: 90 – 180 days (simultaneous with procedure 6)
Completion Costs: no cost
Points to Note:
The Tax Authorities Certificates (confirming the payment of the taxes) are obtained from the relevant tax authorities: (1) Land Betterment Tax (Capital Gains Tax on real-estate); (2) Sales Tax; and (3) Purchase Tax; and (4) property tax.
The parties need to wait up to 180 days from the date the report was filed. Within that time the tax authority decides whether to accept the self-assessment filed with it, or to reject it and issue a different assessment.
If any of the tax authorities rejects the self-assessment filed with it, and issues a higher assessment, the balance of tax must be paid or an objection filed, in which case a bank guarantee covering the assessments difference should be provided to obtain the Tax Authorities Certificates. Legal proceedings to change the tax authority’s assessment may be initiated.

Step 6: Obtain tax clearance from the Municipality

Completion Time Frame: 3 – 10 days (simultaneous with procedure 5)
Completion Costs: NIS 145
Points to Note:
The Municipal Certificate for transfer of title confirms that all the Municipal Taxes relating to the use of the property were paid and that there is no Municipality Appreciation Levy liability or that such liability was discharged.
The Municipality Appreciation Levy is paid on the appreciation in the value of the property due to change of the permitted use of the property (“the Appreciation”). The assumptions in this case study do not indicate that such a change was made, so there is no Municipality Appreciation Levy liability. The rate of the Municipal Appreciation Levy payable is 50% of the Appreciation.

Step 7: Apply for registration at the regional Land Registry Office

Completion Time Frame: 7 days
Completion Costs: NIS 27
Points to Note:
When all the certificates mentioned in Procedures 5 and 6 are obtained, the sale deed is prepared by the parties or their lawyers and signed by both parties. The parties can, if they want, prepare the deed by themselves and sign it before the Land Registrar.
Lawyer fees will increase costs by about 1% of the transaction value.
When the registration is made in the Land Registry, the signature of the parties on the deeds and other certain details relating thereto are required to be authenticated by a lawyer or the Land Registrar, after the nature of the transaction and the consequences thereof were explained to the parties and it was clear that the parties willingly signed it.

The transaction is subject to a 15.5% VAT, paid normally on the 15th day of the month following the date of receipt of payment

The documentation shall include:
• Transfer deed (prepared by the parties or a lawyer)
• Tax Authorities Certificates confirming tax payments (obtained in Step 5)

• Municipal tax clearance (obtained in Step 6)

• Certificate of incorporation of the parties

• Minutes of the companies’ board of directors with resolution to execute the transaction. (If a power of attorney was executed by the company and authorized by a notary that the subscriber is empowered to execute on behalf of the company- there is no need to attach the minutes).

• Counsel’s or accountant’s certificate regarding both companies including the following details: existence of the company; the company is authorized to execute the transaction according to its articles of association; and the participants at the board of directors meeting as detailed in the abovementioned minutes are the directors of the company and empowered to act on behalf the company and to sign the deed of transaction.