Buying property in Israel as a US citizen

Purchase tax, FATCA and FBAR, money transfers, mortgage: everything an American buyer needs to know.

Can a US citizen buy property in Israel?

Yes. Israel places no restrictions on foreign buyers: US citizens buy under the same property law as Israelis. You will need an Israeli real estate lawyer, an Israeli bank account, and a notarized power of attorney with apostille if you sign remotely. Ownership is registered at the Tabu (land registry) — the registration, not the signature, is what makes you the legal owner.

Money transfer and currency: what to prepare

Prices are set and paid in shekels (₪). Open an Israeli bank account in your name before transferring funds — non-resident account opening takes a few weeks, so start early. Declare that the purchase is funded from abroad and keep full traceability of every transfer: this is what allows you to repatriate the proceeds when you sell. Exchange risk is real — budget in dollars, but pay in shekels, and avoid timing the currency market at the last minute.

US tax reporting: FATCA, FBAR and Form 8938

Owning Israeli property directly does not trigger FBAR or Form 8938 on the property itself — but any Israeli bank account exceeding $10,000 at any point in the year must be reported on the FBAR (FinCEN Form 114). Rental income is reported on your US return (Schedule E), with a foreign tax credit (IRS Form 1116) for Israeli tax paid. Capital gains on resale are taxable in both countries, with the treaty credit avoiding double taxation. Work with a CPA experienced in US-Israel matters before you sign.

Mortgage (mashkanta) for US buyers

Israeli banks lend to US persons: up to 50% of the property value (75% for residents), over 20-30 years, at 2026 rates of roughly 4-6% depending on the track (fixed, prime-linked, inflation-indexed). Expect 4-8 weeks for approval and full documentation (W-2/1099, bank statements, passport). Alternative: borrow against US home equity (HELOC) — higher LTV is possible, but with USD/ILS exchange risk. See our mortgage guide.

Tama 38 and Pinouy Binouy: what a US buyer should know

Tama 38 and Pinouy Binouy are Israel's urban-renewal programs: Tama 38/1 reinforces and extends existing buildings (adding space including 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

You don't need to fly in to sign. A notarized power of attorney with 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 the US? Get accompanied English-speaking lawyer, mortgage broker and tax adviser — one point of contact.