Edited by: Fern Sidman
Now that the corner is being turned on the deadly Covid pandemic, many people are giving serious consideration to packing up and leaving New York City and other US metropolises and heading to Israel for the safety it provides.
As such, the real estate market in Israel is beckoning buyers from throughout the world. Before purchasing property in Israel for either residential purposes or even commercial reasons, there is much to learn prior to plunking down cash.
According to a recently published article in the Jerusalem Post, there are two components that must remain a priority before closing any deal and they are location and reputation. The JPost report highlights the exquisite Hess-7 Project for those who are interested in living in Jerusalem. It is located in a quaint and cozy neighborhood of the city known as Talbiya.
The founder and owner of Oren Cohen Prime Real Estate is none other than Oren Cohen himself and according to the JPost report, he has established a stellar reputation for high-end marketing and brokerage over the last 30 years. In essence, he is someone who gained an inordinate amount of knowledge and expertise of the real estate industry and can assist just about anyone who wishes to buy property in Israel.
The JPost reported that since 1998, “Cohen was CEO and owner of the property company, Century 21, and in 2020, he went out on his own and established the Oren Cohen Prime Real Estate office. His office focuses on dealing with pre-sale (new projects) in Jerusalem, and high-end properties with quality clientele from around the globe such as the US, the UK, Europe, Australia, South Africa and South America. “
Speaking to the JPost, Cohen said, “I stand for integrity. My best form of marketing is word-of-mouth. Satisfied clients know the value and quality of service they will enjoy when they work with me. Naturally, they tell their friends and spread the good word. As such, my clientele are my best promoters.”
Cohen adds: “Business is all about people. We make sure to know our clientele – what they are looking for, what suits them and most importantly, what they need.”
Moreover, Cohen said that his company provides “an outstanding after-sale service and we are dedicated to our clients all the way to the Chanukat Habayit (Jewish ceremony to inaugurate a new home) and long after. Our customers become our best friends and become ambassadors.”
“During COVID, we used our attractive marketing materials, Zoom presentations and videos to give potential purchasers a real-as-possible tour, “ Cohen said. “Actually, during COVID, we engaged in sales of apartments, houses and units in upcoming new luxury projects in areas that are in high demand,” he added.
“My office which is currently being refurbished, on Keren Kayemet St. in Rehavia is not just my business center, but also where clients and passers-by feel at home, “ Cohen told the JPost. “I even have a weekly shiur for locals (Torah class). I feel so privileged to be providing homes for Jews from all over the world, in Israel. Jews don’t pray towards New York, Paris or London, but towards Jerusalem.”
Because of his illustrious reputation for honesty, fairness, great value, hard work and total dedication to the needs of the prospective buyer Cohen’s company was quite active in sales during the Covid pandemic, as new customers learned quite quickly that he was someone they could trust and work with in a highly harmonious manner.
The JPost concluded that, “Oren is your ideal go-to-person if you want to buy your dream property in the heart of the Jewish Homeland and in Jerusalem.”
In terms of real estate trends, the JPost reports that is one is indeed interested in investing in property in Israel in the post-Covid era, now is the most propitious time to do so as the demand for residential apartments in the country is only increasing. What is also causing the increasing demand for real estate is the low interest rate environment and the natural growth rate of the population in Israel.
When the global economic crisis erupted in 2008, this triggered the upward trend in demand, as was reported by the JPost.
The publication presented an astute financial analysis of the situation by saying: “During the crisis, the shekel experienced a sharp appreciation against the basket of currencies, which led the central bank to sharply lower the Bank of Israel’s interest rate. If in September 2008 the interest rate was 4.25%, in March 2009 it was already only 0.5%.”
The reason that one is encouraged to investigate purchasing opportunities now rather than at some point in the future is that the number of properties in areas of high demand in central Jerusalem is limited. Also, prices are on the rise because obtaining permits for building projects in the future is quite an arduous process. Chances are likely that the high price level will be a constant in the future because of the low interest rates in addition to the limited land that is available for purposes of construction. And they factor in the bulky bureaucratic red tape and the ever increasing demographics.
According to the isratransfer.com web site, whether you are looking to buy a previously-owned home or a brand new one directly from a contractor (on paper), it is important to understand the “nitty gritty” details of Israel real estate (nadlan) prices – including all of the surprise hidden costs.
An important expense not to be overlooked when buying a home in Israel is the purchase tax, a graduated tax based on the value of the home, which in most cases must be paid within 60 days of the signing of a contract. This tax is calculated based on the division of the total purchase price into various brackets, where a different rate is applied to each. For example, a buyer of a sole residential apartment is exempt from tax on the first 1.7 million shekels in home value (approx.). The next 300,000 NIS (approx.) is then taxed at 3.5%. From 2 million to 5.2 million NIS (approx.) in value the buyer is subject to 5% tax. Getting up into the highest of levels, from 5.2 million to 17.3 million NIS (approx.) in home value a tax of 8% is imposed. Anything beyond that is taxed at 10%. Please note that the rates change every January in accordance with the Israeli Consumer Price Index, so it is important to verify the latest rates at the time of your purchase.
Isratransfer reports that purchase tax is also applied differently to multiple home owners, or even depending on your legal status. For example, new immigrants (olim hadashim) pay a reduced rate within seven years of their aliyah (or if the apartment was purchased within one year prior to making aliyah). In this case, the buyer pays 0.5% on the first 1.79 million NIS (approx.) in value, and 5% on any amount above that, although, again, it is important to check for the most up to date rates.
If you are selling your current home in Israel to buy a new one, you must factor in the Capital Gains Tax – also known as the Land Appreciation Tax. If you are selling your property in Israel for more than you originally purchased it for, you are obligated to pay somewhere around 25% at the most on the net gain. Exemptions and/or leniencies from this tax are available in certain situations, so make sure you check with a lawyer to determine your eligibility and plan ahead prior to the sale, according to Isratransfer.
Isratransfer adds that additional property taxes to be aware of include Income Tax (Mas Hachnasa), which may be relevant if you plan to rent out part or all of your home, and Municipality Tax (Arnona), levied on homeowners by the local authority. The Municipality Tax rates, which change annually and vary depending on the area, are calculated based on the size of the property. For more information on these taxes, please speak to a licensed real estate agent or local municipality (irya).
Buying a home is a complex process, which always requires the guidance of a legal expert with thorough knowledge of Israel real estate laws and processes. Real estate attorneys generally charge between 0.5-1.5% (plus V.A.T.) of the property value, with many lawyers charging a minimum of 5,000-10,000 NIS. If you are buying a new property directly from a developer (kablan), you will have to pay the developer’s legal fees. For apartments which purchase price is lower than 4.6 million NIS (approx.) this will be limited to 5,000 NIS (plus V.A.T.), and for apartments that cost more than that, it’s not limited, but generally it will be 1.5% of the purchase price (plus V.A.T.), regardless of the fact that the seller’s lawyer neither represents you, the buyer, nor looks after your interests. This is to cover the costs of registering and transferring title to your name when the building gets registered.
The JPost reported that one of the latest properties Cohen is selling are apartments is in the Hess-7 complex, on the prestigious and quiet, one-way Hess Street in Jerusalem.
Located in the heart of the picturesque Talbiya neighborhood, the Hess-7 complex, is a new, luxury complex located between the world-famous Waldorf Astoria and the King David hotels in the heart of the city. The project offers two-bedroom units, as well as two luxurious penthouses units with large sukkot terraces facing open views- perfect for a vacation or permanent residence, according to the report.
“The apartments for sale are perfect for religious people. With over 15 shuls in less than a 5-minute walk – including for both Sephardim and Ashkenazim – the project is in close proximity to the Great Synagogue and Rehavia’s Netzach and Kahal Chassidim shuls, “ as was reported by the JPost The buyer will be assured of being on the doorstep to Jerusalem’s religious and cultural hub of activity.
Weighing on the Hess-7 Project, Cohen told the JPost “the location is perfect. Just 3 minutes from Mamilla Mall and the hotels along King David, 20 minutes from the kotel, 10 minutes from Rehavia, 5 minutes from the city center and 10 minutes from the German Colony. Moreover, the land is private land and not church land. Thus, buying property in Hess-7 makes it a very sensible future investment.
He adds that: “The basic structure of the building has already been completed. The design of the apartments has been carefully planned, including air conditioning, underfloor heating and high quality, fully-fitted kitchens. The properties have high-end interior design, in line with the high-class area.”
“The short-term and long-term lease in the area, and the small number of new and available residential projects on private land in the area affect the sale prices. In Israel, natural demographic growth is among the highest among developed countries, even without the immigration of Diaspora Jews. By 2048, when the country is 100 years old, the population is expected to double and the country will have to provide housing solutions and in a short time rebuild what we have built here in the last seventy years,” says Cohen.
Because Jews the world over have dreamt for over two thousand years of returning to the holy city of Jerusalem (which is Israel’s eternal, undivided capital for posterity), it makes total sense that the tranquil Hess Street is the perfect place to establish a dream home for any prospective buyer from any country in the world.
Reach out to Oren Cohen today to learn more about your residential home options. Please visit his website at: www.orencohengroup.com
(Sources: Jerusalem Post & www.isratransfer.com)