Real estate experts: Kibbutz investments

Vol XXXIV: As a kibbutz member is it wise to invest in a private home on the kibbutz? How is residential value assessed? Is it wiser to invest in the small residential community being established for non-kibbutz members adjacent to the kibbutz?

apt building (photo credit:)
apt building
(photo credit: )
For Housing resources click here. Our Experts For Jerusalem and the surrounding areas including Modi'in, Bet Shemesh and Ma'aleh Adumim: A native New Yorker, Shelly Levine is owner and manager of Tivuch Shelly Ltd., a leading real estate company that services all of Jerusalem and its surrounding areas and specializes in English-speaking clients. For Ra'anana and the surrounding areas, including Kfar Saba and Hod Hasharon: Re/max Ra'anana - with over 15 years experience in the greater Ra'anana region and extensive knowledge of the surrounding areas - provides top real estate advice and services, and specializes in clients from English and French speaking countries. * * * Click here to send us your questions and please leave your comments on the Q&A below. * * * Volumes I-XV Volumes XVI-XIX Volumes XX-XXIV Volumes XXV-XXVII Volumes XXVII-XXX Volumes XXXI-XXXII * * * Vol XXXIV Q: As a kibbutz member is it wise to invest in a private home on the kibbutz? How is residential value assessed? Is it wiser to invest in the small residential community being established for non-kibbutz members adjacent to the kibbutz? A: It depends on how you answer some very important questions. First, where is the kibbutz located? Believe me the residents of Ramat Rahel in Jerusalem are sitting pretty, whereas those in an isolated Negev kibbutz may not be (in this sense.) Next, what are your longer range goals? Security of owning a home, association with the Kibbutz, appreciation in investment value? I really need your position on these questions in order to give an intelligent answer...but meanwhile, good luck! Q: I am a us citizen, can i buy and own a home in Israel, land....small farm...? A: Of course! Israel is an open, free Jewish society and your purchase is invited and encouraged. Many here believe that every Jew everywhere should own a personal stake in Israel. There is no legal or tax distinction between Israeli and non-Israeli home property ownership except for a few very technical aspects. Q: I'm planning on making aliyah within the next 2 years. Is it more advantageous to buy an apartment before or after making aliyah. I will not be needing a mortgage. A: Many olim today prefer to buy a new home prior to their aliyah since they can make their special changes, have the unit ready and usually enjoy a lesser price today. The sole consideration would be the one-time "mas rechisha" property tax. If you sign the contract one year or less before your actual aliyah date, then you are eligible for a significant tax break on that one tax. We look forward to welcoming you to Israel soon! Q: I am making Aliyah this summer. I wish to purchase an apartment. I do have a judgment against me in Canada. If my creditor pursues me legally in Israel, can a Lien or Israeli equivalent be placed against my residence in Israel? A: My expertise is real estate and not, unfortunately the law. I recommend that you consult with a competent lawyer in Israel who understands issues of this nature. I believe you should be able to work it out to your satisfaction. Good luck. Q: I would like to buy a little house with a garden in the green areas outside Jeru. Pref up to 30 mins away as I still need to work in the city. Do I have a hope of finding anything under 300,000$??? A: Sure, for that budget you should be able to find something in places like Maaleh Adumin, Mevaseret Zion, Bet Shemesh, Givat Zev or Modi'in to name only a few! You do need to examine options in all of these as each one has its own unique benefits and advantages. Q: My son is planning to make Aliyah in January. We would like to buy an apartment in his name. At the moment he is planning to do Ulpan for 6 months and then army for a year. Only after that would he have any real earned income. He has around £400 a month income from other sources. In order to get a mortgage, the banks would take into account his income. How does this work during the ulpan/army period when nobody could be expected to have earned income? A: For every (approx.) NIS. 100,000 borrowed in Shekelim (mortgage) you can count on paying back $550 a month, in the equivalent NIS. rate. I think the best thing to do is to buy an apartment on plans now, always cheaper than a second hand unit, and this will enable you to pay it out over the first two years while he's in the army...and he will emerge then with a solid home and investment in hand. Q: I have a Rabbi son, married with 3 kids who lives in Migdal Haemek. If they buy now, are prices likely to rise or should they wait 2-3 years and then buy. The current climate in South Africa suggests a downslide. Do you have any info on Property in Migdal Haemek and on the general sense of where prices are going to go A: Believe it or not, Israelis with limited funds available should not waste their resources on paying out rentals. The smaller the budget, I believe, the more urgent to buy a home. Of course the flip side is to buy the right home on the right budget. Rents are generally very high in Israel, and this is what convinces the vast majority of young Israelis to buy homes rather than rent. In short: Go for sooner rather than later. Best regards. Q: I was hoping you can help me. I have recently moved in to Israel and would like to get in to the real estate market here, as I am qualified to do so in Australia. I assume like all other countries I would have to get an Agent Rep's License. I am trying to find an English text book, being that English is my first language it would be much easier that way. I was hoping you would be able to advise me how as to how I would go about it finding an English text book here in Israel and as well if I can take the test in English too? A: Call my office 02-566-2499. I think we may have an English translation of the book, but the test MUST be taken in Hebrew. To qualify, your level of Hebrew must be sufficient to conduct (even minimally) business in this field in the country. Good luck * * * Vol XXXIII Q: I own an apartment that I would like to directly trade for another real estate investment in another area of the country. Is this possible and who can help me with this, or are there lists of builiders that are willing to trade? My apartment is in the religious community of Kiryat Chabad in Safed A: An outright trade is not possible, to the best of my knowledge. You must do two separate transactions, a buy and a sell. There is no tax when you SELL an apartment in Israel, but there is a purchase tax when you buy one. The titles must be transferred by a lawyer and the taxes paid. Good luck. Q: My husband and I made Aliya about 10 months ago. We purchased an apartment. It needs a total makeover. The building is from 1935. Our Kablan has added 16% for taxes. His work is demolition, breaking down some walls removal, new wiring, insulation, heating, air conditioning, plumbing, heat saving double glass windows, putting up walls, doors, floors (wood). We are on SSec and I am on Disability Soc Sec. Is there any benefit for seniors? Will we also pay 16% for all the sinks, faucets, tiles flooring, toilet fixtures, kitchen cabinets and other carpentry (beds and closets)? If I bought separate air conditioners wouldn't there be a break on the taxes? Should I bring these items in my lift? A: He sounds like a reasonable service provided. The tax you mentioned is Value Added Tax (VAT), at 15.5% (not 16%), and he is required by law to charge you this tax. If you were a company, you would be eligible to get this refunded, but not private individiuals. You must make sure, however, that he gives you official VAT receipts in which this tax as well as the charges for the work, are clearly itemized. As olim chadashim, you are entitled to certain tax breaks on new appliances. I suggest you speak with Nefesh b'Nefesh or AACI for precise details on this question. Best regards, Shelly Q: What do you know about the possibilities of purchasing property in Old Akko. I'm familiar with the town and I'm a returning citizen as well as a professional Real Estate developer and licensed R.E. Broker? Jaffa is OK but I like the North. I'M looking for some long term investments. A: Hi. It's funny you should bring up this somewhat obscure subject. I actually sat through an interesting seminar at the Tourism Ministry and they emphasized this is a high priority development for their programs. I suggest you be in touch with the Tourism Ministry--ask them who is in charge of "gentrifying and developing" Akko. Sounds like a promising idea. Let me know how it turns out please. Shelly Q: If I have rental income from a flat in the UK and pay tax on it to the inland revenue in UK, do I have to pay tax on the same amount to the israel tax authority, is there something called double taxation agreement whereby I can offset some of the tax paid? A: Obviously, this is a question for a tax lawer or accountant who knows the laws in both countries very well. However, I have never heard of anyone being liable to double taxation, so my gut feeling is that you will be able to avoid this. But as I said, I'm in real estate, not accounting, so please speak with the expert and set it up in an orderly way to ensure your maximum benefits. Good luck. Q: My brother in law owns a piece of land in Hebron valley. It is closer to Israel from the new political borders, and about 30 minutes from Hebron city. He wants to sell the land any advice please. A: How big is the parcel of land? Will the Israeli government permit Jews to live there? If so, then of course it becomes more valuable. I many of these instances re: land in Judea or Samaria, there is a lot of murkiness regarding how secure the land title is. Is your brother convinced there is nothing tenuous about his title? I would speak to the Jewish municipal authorities in Hebron and Kiryat Arab and get their advice which is much clearer on this area than anyone else. Politics are involved, clearly, in this area, which can only complicate the equation, I'm afraid. Shelly Q: Will you please advise the costs, levies, duties etc and taxes payable when disposing of our only property in Israel jointly owned with my wife which we bought back in 1973: 1.sell in the open market 2.sell to our daughter 3.gift to our daughter My wife and I and our daughter are non-resident Israelis. Thank You in Advance A: It makes no difference if you sell it to a private individual or a family member, the purchaser is liable to the one-time purchase tax. If you give it as a gift today, you need to check with a legal authority, but if it is willed to her, there would be no estate taxes in 120 years. Again, this is estate planning and taxes...I am a realtor. One final tidbit: If your daughter is unmarried and never bought a home in Israel, this transaction might limit her potential benefits should she ever wish to purchase something on her own Q: My family is moving to Israel this summer for a period of 1-2 years. We would like to rent a house or an apt (we have 3 children). The area we would like to live in is Tirat Carmel. How should we look for an apt or house? A: The best thing to do is to check out the local Haifa area newspapers and on-line special interest groups and you'll find many leads. Alternatively, go to a reputable realtor specializing in that area (which we don't do) and find a good, credible guide to help you in your quest. That's the most sensible way to pursue it. Good luck. Q: I have a legal question regarding realtors. My mother more than a year ago was approached by a neighbor who a real-estate agent suggesting that she sell her apartment through her. My mom is a widow who moved to live with my sister and the apartment was rented out to my niece. My mom agreed and the realtor asked her to sign a letter that she will and the commission etc. There is no time limit on the letter that says when the agreement is over. As time passed my mother had a change of heart and decided she didn't want to sell. The neighbor realtor also turned out to be unreliable brining us to meetings with clients only to find out that they are not willing to pay what she claimed. Regardless my Mom decided not to sell and my sister faxed the realtor that we don't need her services any more and left her a letter in her mail box. We also told another realtor we are not interested any more. I also told her face to face that we don't want to sell and to stop bothering us. She continued to pester us and come up with claims that she has serious buyers and we continued to say that we are not selling. One day she got access to the house from my niece to show the place to a client who indeed made a great offer. My mother therefore decided she will sell and told the realtor that we will not pay her any commission as we asked her to not represent us a long time ago. The realtor is being paid by the buyers her commission and now she wants the commission from us! She claims she didn't get the fax (my sister has phone records that she faxed to her number), that she didn't get the letter in the mail box or that we told her. She says my mother is senile (I guess that's why she kept bothering and pestering her and not listening to our wishes). What is the law? How long does this letter of agreement last if there is no date on it? What can we do if she keeps saying she wasn't told we don't want her (she says we should have sent a messenger). Isn't there in Israel like in the US buyers-agent and a sellers agent? She is clearly being paid as a buyer's agent and want to capitalize on us. She is going to sue us if we don't pay - so she says. A: I understand your issues, but here is the reality: You made a deal with this agent that if she helped you find a buyer for the house, you would pay her. This is standard practice not only in Israel but everywhere (and the fees are typically much higher in the US than here.) You then decided not to use her services. Fair enough. But then, she brought you a good buyer and you had a choice: Either accept the deal and pay her or NOT sell the apartment and don't pay her. You can't use the woman's services and then try to stand on a technicality not to pay her. She provided a service which you agree was helpful and is trying to support her family. Pay her and enjoy the income from the sale! Q: I'm being offered two adjacent holiday flats that will be combined into a larger one but... the seller is describing the sale as two separate units only! size of each is about 55 sqmt. Is that a legal restriction or else why is he not making a document for a single larger unit? Thanks in advance for any help you can provide! A: How it works in Israel there are two separate units by law, and each has its own separate title. The government and Land Authority has deemed these in the original tender and specs on the project as two distinct investments. The government usually works against speculation in the market, they like people to live in places. That is what stands behind this policy. You don't have extra taxes for buying, but if you decide to sell them both in a few years, you will be subject to a considerably higher tax on the second unit, not on the first. When you hold two apartments and you sell them both (during the same 4 year period), that's when you are subject to this elevated tax. You CAN sell the same one apartment many times and NOT be subject to this law. Hope it's clear! * * * Cafe Oleh experts have been chosen for their knowledge and reputation. Cafe Oleh does not take responsibility for any advice they offer. Click here to send us your questions for Shelly, please include your name, city and country.
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