To buy a resale (second-hand) apartment in Israel you make an offer, hire your own real estate lawyer, sign a contract (not a casual memo), pay a deposit into escrow, register a warning note (he’arat azhara) at the Land Registry, pay in stages tied to the seller clearing debts, take the keys, then complete Tabu registration in your name.
By the Semerenko Group research desk.
Fast summary: the resale buy at a glance
- Order of events: offer to lawyer to contract to deposit to warning note to staged payments to keys to Tabu registration.
- Deposit: usually 10% to 20% of the price, held in the lawyer’s escrow (ne’emanut), not handed straight to the seller.
- Lawyer cost: commonly around 0.5% to 1% of the price plus 18% VAT. Confirm a fixed fee in writing.
- Agent commission: about 2% + VAT (~2.36% effective) per side, negotiable, no legal cap (israelhomes.net, 2026).
- VAT: a private resale is generally not VAT-able, unlike a new build from a developer where 18% VAT sits inside the price (VATupdate, 2025). This is a real cash saving on resale.
- Purchase tax (Mas Rechisha): an investor or most foreign buyers pay 8% up to 6,055,070 NIS, 10% above (frozen to 31 Dec 2026). An Israeli buying an only home starts at 0% (Kol Zchut, as of 31 Mar 2026).
- Mortgage cap: an Israeli sole-home buyer can borrow up to 75%; an investor or additional-home buyer is capped at 50% (Bank of Israel, 2026).
- Timeline: a clean deal can close in 6 to 10 weeks. Final Tabu registration in your name can take a few months after you have the keys.
- Biggest risk: signing anything (including a “memo of terms”, zichron devarim) before your lawyer checks title. In Israel that memo can be a binding contract.
Tax, mortgage, and tax-rate figures change. Verify current figures before you act, and confirm your own numbers with a licensed Israeli tax lawyer or mortgage advisor.
This page covers the second-hand (existing apartment) process only. If you are buying from a developer before or during construction, read our step-by-step guide to buying new-build or off-plan in Israel instead, because the payment flow and protections are different. This page sits under the buying-process sub-hub and the wider Israel property investment hub.
What is a resale apartment, and how is buying one different?
A resale apartment is an existing home you buy from its current private owner, not from a developer. The two differences that matter most for the process: there is usually no 18% VAT on a private resale, and the apartment may already carry a mortgage or debts that the seller must clear before you own it clean. So your money is released in stages, each stage tied to the seller removing one problem.
Because the home already exists, you can inspect the actual unit, the building, and the neighbours before you commit. You do not have a developer guarantee (the protection that secures payments on a half-built project), so your protection comes from the contract, the escrow account, and the warning note your lawyer registers.
What are the steps to buy a resale apartment in Israel?
Here is the normal order. Do not skip the lawyer, and do not sign anything before step 3.
- Agree a price and basic terms verbally or by email. Price, what is included (parking, storage, fixtures), and a rough possession date.
- Hire your own Israeli real estate lawyer. The seller’s lawyer is not on your side. Your lawyer runs the title check and writes or reviews the contract.
- Title (due diligence) check. Your lawyer pulls the Tabu extract (nesach Tabu) to confirm who owns it, and looks for mortgages, liens, the warning notes of others, and any betterment levy (hetel hashbacha) the seller owes.
- Sign the contract (heskem mechira). Only after the title is clean. The contract fixes the price, the payment schedule, the possession date, and penalties for late delivery.
- Pay the deposit into escrow. Usually 10% to 20%, held by a lawyer in trust, not given to the seller to spend.
- Register a warning note (he’arat azhara). Your lawyer files it at the Land Registry the same day. It tells the world you have a contract and stops the seller selling the same flat twice.
- Pay in installments as the seller clears debts. Each payment is released only when the seller proves the matching step (mortgage discharge, tax certificates, vacant possession).
- Final payment and keys. You pay the last installment, get vacant possession, and take the keys.
- Tabu registration in your name. Your lawyer files the deed transfer once all tax clearances are in. This finalises ownership.
How much does buying a resale apartment cost in total?
Plan for the price plus roughly 8% to 13% on top for an investor or foreign buyer, mostly purchase tax. Here is a worked all-in cost example. This is our own worked example, not a quote.
Worked example: a foreign investor buys a 3,000,000 NIS resale apartment.
- Purchase tax at the investor rate, 8% of 3,000,000 = 240,000 NIS (the 10% band only starts above 6,055,070 NIS).
- Agent commission, 2% + VAT (2.36%) of 3,000,000 = 70,800 NIS.
- Lawyer, say 0.75% + VAT (0.885%) of 3,000,000 = 26,550 NIS.
- Appraisal, translation, and bank fees, allow ~10,000 NIS.
- Total added cost = 347,350 NIS, about 11.6% of the price. Cash needed if borrowing the 50% investor maximum: 1,500,000 NIS equity + 347,350 NIS costs = 1,847,350 NIS.
Now compare an Israeli buying the same flat as their only home. Single-home purchase tax on 3,000,000 NIS is 0% on the first 1,978,745, then 3.5% on the slice to 2,347,040, then 5% on the rest to 3,000,000. That is 0 + 12,890 + 32,648 = about 45,538 NIS, versus 240,000 NIS for the investor. The tax gap alone is roughly 194,000 NIS on this single deal. That second figure is our own worked example using the published Kol Zchut bands; verify the bands before relying on them.
Resale buyer cost comparison
| Cost item | Israeli, only home | Investor / most foreign buyers |
|---|---|---|
| Purchase tax (Mas Rechisha) on 3,000,000 NIS | ~45,538 NIS | 240,000 NIS |
| Max mortgage (LTV) | 75% | 50% |
| VAT on the price (private resale) | None | None |
| Agent commission (per side) | ~2% + VAT | ~2% + VAT |
| Lawyer | ~0.5% to 1% + VAT | ~0.5% to 1% + VAT |
To test your own monthly mortgage at the current 3.75% Bank of Israel policy rate, run the numbers in the Israel mortgage calculator before you make an offer. For the rules on who can claim a commission, see our page on Israeli real estate agent fees and rules.
Why is the lawyer and the contract so important?
In Israel the buyer’s lawyer protects your money and your title, and a casual “memo of terms” can already bind you. A zichron devarim (memorandum of understanding) that names the parties, the property, and the price has been treated by Israeli courts as a binding contract. If you sign it and then your lawyer finds a hidden lien, you may forfeit your deposit. So the rule is simple: do the title check first, sign one proper contract, and let your lawyer hold the money.
Your lawyer’s three core jobs on a resale: (1) confirm clean title at the Tabu and find any debts, (2) hold the deposit in escrow (ne’emanut) so it is not lost if the deal collapses, and (3) register the warning note so the seller cannot resell or re-mortgage behind you.
How does the staged payment schedule work?
You pay in installments, and each installment is released only when the seller completes a matching obligation. This is the heart of resale protection, because the apartment may carry the seller’s own mortgage that must be paid off from your money.
A typical pattern (the contract sets the exact split):
- On signing: deposit of 10% to 20% into escrow, plus registration of your warning note.
- Middle payment(s): released when the seller delivers tax clearance certificates and proof the existing mortgage is being discharged.
- Final payment: paid against vacant possession (empty apartment, keys handed over) and a clean Tabu ready for transfer.
Never make the full payment until the seller’s old mortgage is removed from the Tabu. Your lawyer checks this.
What about taxes and registration after I get the keys?
After the final payment you take the keys, but legal ownership is only complete when the transfer is registered in your name at the Tabu. Your lawyer files this once the tax clearances are issued. Until registration finishes, your warning note is what protects you.
The buyer’s main tax is purchase tax (above). Capital gains tax (Mas Shevach), 25% on the real gain, is the seller’s tax, but it matters to you because the seller needs that clearance before you can register. Foreign residents usually cannot use the single-home capital gains exemption (PwC, Israel individual tax summary, 2026). These rules shift, so confirm current rates with a licensed Israeli tax lawyer.
Quick checklist before you sign
- Hire your own buyer’s lawyer (not the seller’s, not the agent’s).
- Get a fresh Tabu extract and read it: owner, mortgages, liens, warning notes.
- Confirm any betterment levy (hetel hashbacha) the seller owes is the seller’s responsibility in writing.
- Agree the deposit goes into escrow, never directly to the seller.
- Check the contract names the possession date and penalties for late delivery.
- Confirm the warning note will be registered the day you sign.
- Budget purchase tax at your correct rate, plus agent and lawyer fees.
- Pre-approve your mortgage so you know your real cash gap.
Buying from overseas? You can run almost all of this remotely with a power of attorney. See our guide to buying property in Israel remotely from abroad.
Your next step
Get your title check and contract review lined up before you make a binding offer, so a clean apartment does not slip away while you scramble for a lawyer. Contact the Semerenko Group team to plan your resale purchase and review a specific apartment.
Reviewed by the Semerenko Group brokerage team. Last updated 15 June 2026. This page is general information, not legal or tax advice. Confirm every tax, mortgage, and legal figure with a licensed Israeli tax lawyer or mortgage advisor before you act.
Sources
- Bank of Israel, loan-to-value limits and borrower risk: https://www.boi.org.il/en/communication-and-publications/press-releases/ltv-limits-and-borrower-risk/
- Bank of Israel, May 2026 rate decision (policy rate 3.75%): https://www.boi.org.il/en/communication-and-publications/press-releases/25-05-2026/
- Kol Zchut, purchase tax (Mas Rechisha) calculation and bands: https://www.kolzchut.org.il/he/חישוב_מס_רכישה
- PwC, Israel individual income determination (capital gains, rental tax): https://taxsummaries.pwc.com/israel/individual/income-determination
- VATupdate, Israel VAT rate 18% from January 2025: https://www.vatupdate.com/2024/12/30/israels-vat-rate-to-increase-to-18-starting-january-2025/
- Israel Homes, real estate agent commission and the Real Estate Agents Law 1996: https://www.israelhomes.net/israeli-real-estate-agents/
Common questions
Do I pay VAT when I buy a second-hand apartment in Israel?
Generally no. A private resale between individuals is normally not VAT-able, so the 18% VAT that sits inside a new developer apartment does not apply. You still pay purchase tax (Mas Rechisha), agent commission, and legal fees. Confirm your specific case with a licensed Israeli tax lawyer, since a seller acting as a business can change this.
What is a he’arat azhara and why does it matter?
A he’arat azhara is a warning note your lawyer registers at the Land Registry (Tabu) the day you sign. It records that you have a contract to buy the apartment, which blocks the seller from selling or re-mortgaging it to someone else. It protects your purchase during the months before the final transfer is registered in your name.
How long does it take to buy a resale apartment in Israel?
A clean deal often closes in about 6 to 10 weeks from agreed price to keys, depending on the seller’s mortgage and tax clearances. Taking possession and getting keys happens at the final payment. Completing the Tabu registration in your name usually takes a few more months after that, handled by your lawyer.
How much can a foreign buyer borrow for a resale apartment?
By Bank of Israel rules, an investor or additional-home buyer is capped at a 50% loan-to-value, while an Israeli buying a sole home can reach 75%. In practice banks lend foreign buyers around 50%, sometimes more if a spouse is Israeli. So plan for at least half the price in cash, plus costs. Verify current limits with a mortgage advisor.
Should I sign a zichron devarim (memo of terms) before the full contract?
It is risky. A zichron devarim that names the parties, the apartment, and the price can be treated by Israeli courts as a binding contract. If you sign it and your lawyer later finds a lien or other problem, you could lose your deposit. The safer path is to run the title check first, then sign one proper purchase contract.
