Buying Israeli Property with a Partner or Relative
Buying Israeli Property with a Partner or Relative
It is common for Americans to buy in Israel together with someone else: a spouse, a partner, adult children, siblings or a parent who wants a base near family. Joint ownership spreads the cost and the responsibility, yet it also creates questions that do not arise when one person buys alone. How are the shares registered? Who pays for what? What happens if one owner wants to sell, marries, divorces or passes away? Answering these questions in writing before the purchase avoids disputes that are painful and expensive to resolve later, especially when co-owners live in different countries.
Registering the Shares
The Land Registry records each co-owner and the share each holds, which can be equal or unequal. The shares should reflect what the parties intend, often based on their contributions. Changing the shares after registration can trigger tax and fees, so decide before signing.
Where one co-owner is a relative who is financing part of the price as a gift or a loan, document the arrangement clearly so that it is not later misunderstood.
A Co-Ownership Agreement
Beyond registration, a written agreement among co-owners sets the rules of the relationship. It is especially important for siblings or unmarried partners, who are not covered by the same statutory framework as married couples.
Contributions to the price and to ongoing costs
Use of the property and any rental income
Decisions on renovations and management
Procedure if one party wants to sell
Right of first refusal and valuation method
Arrangements on death or incapacity
Couples and Marital Property
For married couples, the law of the relevant country and any prenuptial agreement may affect how property is treated, regardless of whose name appears on the registry. Israeli and US rules can interact in complex ways.
If you are buying with a spouse or partner, ask your Israeli lawyer and your US attorney whether a written agreement is advisable in your circumstances.
Tax Considerations
Israeli purchase tax is generally assessed per buyer and depends on each person's status and other holdings. Buying jointly with someone who already owns an apartment, or who is a foreign resident, may affect the tax outcome for the whole transaction.
In the United States, each co-owner may have reporting obligations, and contributions from one co-owner to another can raise gift tax questions. Consult an Israeli tax advisor and a US CPA before finalizing the structure.
Mortgages and Liability
If you finance the purchase, Israeli banks generally require all registered owners to be borrowers or guarantors. This means each co-owner may be liable for the full loan, not only for their share.
Make sure each co-owner understands this and that the co-ownership agreement addresses what happens if one party stops paying.
When co-owners live on different continents, agree in advance who deals with the bank, who receives notices and how quickly each person must respond to requests for signatures.
Planning for Death and Succession
Each co-owner's share passes according to their will or, absent a will, according to succession law. Without planning, a share may pass to heirs who were never part of the original arrangement.
Many Americans with Israeli property prepare an Israeli will covering their Israeli assets, coordinated with their US estate plan. This can simplify the process for heirs and reduce uncertainty for the remaining co-owners.
Review the arrangement when life changes, such as a marriage, a birth or a move. An agreement signed when everyone was single and living in New York may not fit the family many summers later.
Frequently asked questions
Can I buy with a relative who lives in Israel
Yes. Many Americans buy jointly with Israeli relatives. Each person's tax status will be considered separately, so take advice on how the combination affects the transaction.
Do shares have to be equal
No. Shares can reflect each party's contribution or any agreed division. Record the chosen shares in the contract and the registry.
What if we disagree later about selling
Without an agreement, a co-owner can ask a court to dissolve the co-ownership, which may lead to a sale. A clear agreement with a buy-out mechanism helps avoid this.
Should parents and children buy together
It can work well, but consider succession, gift and tax consequences, and whether a gift or loan structure better reflects the family's intention.
Elkayam Group
As a family business in its third generation, with roots in the forties, Elkayam Group understands how property decisions intersect with family relationships. The group is headquartered at Rival Street 37 in Tel Aviv, where colleagues fluent in Hebrew, English and French coordinate with lawyers and tax advisors so American buyers can structure joint purchases thoughtfully.
Planning to buy together with family or a partner. Speak with our team about the questions to settle first.
+972-53-658-4252 · support@kobielkayamrealestateltd.com · Rival St 37, Tel Aviv
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Key Contract Clauses in an Israeli Property Purchase Agreement
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