No Limit on Rents in Israel

The new Fair Rents Law does not restrict Israeli landlords from raising rents, as had been proposed.

After months of debate and years of controversy, the Fair Rents Law passed into law on July 17 2017. The new law regulates the relationship between landlords and tenants by fixing certain terms for residential leases and creating minimum standards to ensure that rental apartments are fit for habitation.

Although the original version of the law proposed in 2013 included a restriction on raising rents, the final version of the Fair Rents Law does not actually limit landlords’ rights to request an increase in residential rental rates. It also only applies to homes that are rented out for periods of between three months and 10 years, and not to vacation properties.

The main changes introduced by the Fair Rents Law can be summarized as follows:


    Landlords must pay for property insurance, but renters are officially responsible for paying bills for utilities, municipal taxes (arnona) and day-to-day maintenance.


    Renters must pay for any damage that they cause to the property through “unreasonable use”. Owners are responsible for repair of damage caused by “reasonable use,” and must do so within 30 days. Urgent repairs must be carried out within three days, and if they are not then renters can deduct the cost of the repairs from their rent. The landlord must pay for anything that increases the value of the property.


    Landlords may not demand a guarantee or deposit of more than three months’ rent, and this money can only be used if the renter does not pay rent or other payments on time, or if they cause damage to the property, or vacate the property late.


    If the parties agree that the renter can continue living in the property after the contract date, either party can then end this extension arrangement with reasonable notice.


    Whoever hires a realtor to rent out or find a property must pay the real estate agent’s fee.

Shaun Isaacson, CEO of Creative Estates Israel, who is a qualified lawyer and licensed realtor involved in long-term rentals throughout Central Israel, welcomes the new legislation. “Landlords who already provide a good standard of accommodation, and whose properties are well-managed and maintained, are happy that this legislation has finally passed into law. The threat of rent restrictions was worrying for some Israeli property owners, but we are happy to see that the all-important relationship between landlord and tenant will be regulated without imposing unnecessary restrictions.”

It is estimated that 2 million people live in rented accommodation in Israel, and by regulating this market the government hopes to encourage long-term rentals as a comfortable and safe alternative to buying housing.

The “Tent Protests” in 2011 were in part protesting the lack of regulation at the bottom of the rental market, and the proposed regulations designed to create fair economic conditions for renters and reduce pressure in the housing market. The new legislation combines proposals from six private members bills submitted by Knesset members from various parties, and it is seen as a good compromise between the different interest groups represented.

For more information about Creative Estates rental property management service in Israel, contact Shaun Isaacson at or on +972 526521096. We will give you a price quote in complete confidence and without obligation.


Turning One Apartment into Two Investment Properties

Israel property investors can take advantage of today’s low interest rates to expand their Israel real estate portfolios by leveraging their existing assets.

split picOne of our clients owns a property in Israel that is now worth 1.7 million NIS – approximately 30% more than when it was purchased 5 years ago. They wanted to buy an additional apartment in Israel for one of their children without having to sell their investment property, which is earning good rental income, and without having to invest much money.

Based on their existing equity, they raised a 50% mortgage on their current property, enabling them to buy a new-build apartment for 1.7 million NIS in Netanya, which is a fast-growing city with extensive new development underway.

In Israel, rental incomes of up to 4,900 NIS per month can be earned tax-free, and the proceeds used to make monthly mortgage payments. This means that the investor who can fund his purchase by releasing equity from existing properties only has to find sufficient money to cover the costs of the purchase, namely the agents’ and lawyers’ fees and purchase tax.

We recommended to our client that the apartment be registered in the name of their child, in order to reduce their tax liability. This is standard practice in Israel, where wealthy families often buy new apartments in up-and-coming neighbourhoods for each of their children, but it is only possible for Israeli residents.

Because of the way that Israel’s towns and cities are expanded, real estate developers often offer individuals and groups of investors excellent opportunities to buy homes “off-plan” before a new suburb has been built. Over the next few years, as the properties and infrastructure are built and families start to move into the new area, facilities such as health clinics, food stores and kindergartens will be opened, trees and parks planted, and Israel‘s public transport companies will add new bus routes to connect the new streets to the neighbouring suburbs and towns.

Approximately 5 years after the first homes were purchased in a not-yet-existent neighbourhood, their resale value will have almost doubled and their rental value will have risen dramatically. During the early stage of the project, these new properties may have been rented to young singles or couples who do not mind living in a new area with basic facilities.

Creative Estates Israel can help non-Israeli investors to get involved in these same exciting real estate investment opportunities. We are in touch with property developers and aware of many new projects that are being planned and are open for investment. Please contact us to find out more by emailing


Israel’s Prime New Real Estate

The Israel government and the Israel Defense Forces are releasing prime real estate in central Israel for new housing.

The Director General of the Prime Minister’s Office, Harel Locker, announced on June 2, 2014, that all the major Israeli army bases in the center of the country will be vacated and the land put up for sale.

The project is designed to release capital for the defense budget and also to revitalize Israel’s peripheral areas by relocating army bases to the north and south of Israel. This major infrastructure project will also generate economic activity in the less-crowded areas of the country, while enabling 100,000 new housing units to be built in the metropolitan areas where there is high demand for homes.

At Creative Estates Israel we are excited to see new building projects on the horizon in central Tel Aviv and other prime locations which have belonged to the IDF until now. We also expect that the redistribution of army manpower will feed the demand for rental properties outside the main centers of population, helping to rebalance the property market.

If you are interested in finding out more about the latest real estate investment opportunities in Israel, give us a call or send us an email today.

Who’s Buying Homes in Israel?

A record number of homes were purchased in Israel in the fourth quarter of 2013, 29% more than the preceding quarter, and 24% of them were purchased by investors.

Home sales hit a ten-year high as investors rushed to sell unwanted properties before their capital gains tax exemption ended in December 2013. Another factor in the increase in purchases was the launch of the major new real estate development in Rosh Ha’Ayin (as we reported here).

While homebuyer purchases rose 27% in the last quarter of 2013, there are indications that home buying will have slowed in the first quarter of 2014 as many young couples are waiting to see if the government will introduce the tax breaks that they have been promising. The Ministry of Finance says that the tightening of mortgage restrictions is also causing first-time buyers to buy second-hand rather than new apartments.

While some commentators warn of an imminent fall in real estate prices, housing in Israel is expensive. The government’s continuing promises to reduce housing prices has been shown to be unreliable – they have been slow to release more land for housing development. It seems clear that the demand for housing continues to exceed supply, which will always be limited in a country as small as Israel. With an annual population growth of 1.8% and a steady influx of Olim, particularly to the main population centres, property prices are likely to remain high.

So when is the best time to buy a property in Israel? We say always!

Now or next year, whether you are planning to live in Israel sooner or later, using it for rental income or for your children, owning a home in the Holy Land is the best investment you can make!

L’Shana Haba B’Yerushalayim – Happy Pesach to everyone!