Buying property in Israel from Germany

From purchase tax to German tax credit and financing: the complete guide for German buyers.

Can Germans buy property in Israel?

Yes. Foreign buyers are subject to the same rules as Israelis: you will need an Israeli real estate lawyer, an Israeli bank account and — if you are not on site — a notarized power of attorney with apostille. Ownership is registered at the Tabu (land registry); registration is what makes you the owner. Buying off-plan from a developer follows the same rules.

Money transfers and source of funds

Prices are denominated in shekels (₪). Open an Israeli account in your name early — non-resident opening takes a few weeks — and transfer from your German account. Keep complete records of every transfer: documented source of funds is the condition for later repatriating the sale proceeds to Germany. Budget in euros, pay in shekels — EUR/ILS exchange risk belongs in the plan, not in the final week before signing.

Tax: Mas Rechisha and the Germany-Israel treaty

On purchase, non-residents pay Mas Rechisha (purchase tax): 8% up to ₪6,055,070, then 10% above, from the first shekel, due within 60 days — brackets frozen until January 15, 2028. The Germany-Israel treaty (1962 agreement, 2014 protocol) still applies: rental income is taxed in Israel (10% flat rate on gross, or the progressive scale with expense deductions) and reported in Germany via the Anlage AUS under the credit method (Anrechnungsverfahren) — the Israeli tax authority's certificate enables the credit in Germany. Capital gains (Mas Shevach, 25% on the real gain) are also taxed in Israel and credited in Germany. Have a tax adviser with treaty experience review your situation before you sign.

Financing: mashkanta up to 50%

Israeli banks (Leumi, Hapoalim, Mizrahi-Tefahot, Discount) lend to non-residents up to 50% of the property value (residents up to 75%), over 20-30 years, at 2026 rates of roughly 4-6% depending on the track. Expect 4-8 weeks for approval; you will need proof of income, payslips and 6 months of bank statements. See our mortgage guide.

Tama 38 and Pinouy Binouy: urban renewal as an opportunity

Tama 38 and Pinouy Binouy are Israel's urban-renewal programs: Tama 38/1 reinforces and extends existing buildings (adding a Mamad safe room); Tama 38/2 and Pinouy Binouy demolish and rebuild. Buying into an approved project can create value, but timelines are long and many projects never reach permit stage. Verify the actual permit status — not the brochure — before committing funds.

Signing remotely: power of attorney with apostille

You don't need to fly in to sign. A power of attorney signed before a notary in Germany and stamped with an apostille lets your Israeli lawyer sign on your behalf. Start the paperwork early — banks and the Tabu have their own forms and timelines.

Buying from Germany? Get accompanied German-speaking lawyer, mortgage broker and tax adviser with treaty experience — one point of contact.