A new law will take effect on January 1 that required all Israel property purchasers to report the sources of their capital.
The Israel Tax Authority has introduced a new obligation to report on the sources of financing for all real estate deals from January 1, 2019. This is enshrined in the new Minimizing Use of Cash Law, which is designed to squeeze Israel’s black market by limiting cash transactions, in the hope of increasing tax revenue by an estimated 500 million shekels ($145.7 million) each year.
The new law brings Israel into line with other countries that have limited cash transactions to prevent money laundering. It includes a ban on all cash transactions over 11,000 NIS (approximately $300) for any kind of purchase.
The new reporting obligation on real estate purchasers compels them to report the sources of the finance with which they buy any kind of Israeli real estate, whether domestic or commercial. It applies equally to investors and to home owners purchasing any size of property. They must complete an online form on the Israel Tax Authority website within 6 months of signing a purchase contract, and upload adequate documentation to prove the provenance of the funds. Failure to report their financial resources will incur a fine.
Foreign investors are already required to report on the source of their financing when purchasing property in Israel, so this additional obligation being imposed on all purchasers should not unduly inconvenience overseas buyers.
As a qualified Israeli lawyer and realtor, Shaun Isaacson, CEO of Creative Estates Israel, is happy to advise on this new law and all other aspects of your Israel property purchase.