For American buyers
Israel Real Estate for Americans
US citizens buying in Israel face unique tax and reporting obligations. Here's what every American buyer needs to know — before they sign anything.
Americans buy more Israeli real estate than any other foreign nationality
The US–Israel connection runs deep. Thousands of American families own property in Israel — as a second home, an investment, or a future aliyah base. The process is well-trodden, but the US tax and reporting rules add a layer of complexity that most Israeli agents don't fully understand. Bibian Group is licensed in both countries. We work with cross-border tax advisors and know exactly what American buyers need to do.
US tax obligations
What the IRS requires when you own Israeli property
FBAR (FinCEN 114)
If you have an Israeli bank account with a balance exceeding $10,000 at any point during the year, you must file an FBAR annually. Failure to file carries severe penalties — up to $10,000 per violation for non-willful failures.
FATCA (Form 8938)
US persons with foreign financial assets above certain thresholds must file Form 8938 with their tax return. Israeli bank accounts and certain property-holding structures may trigger this requirement.
Rental income reporting
Rental income from Israeli property must be reported on your US tax return (Schedule E). You can claim a foreign tax credit for Israeli taxes paid, which typically eliminates double taxation.
Capital gains on sale
When you sell, the gain is taxable in both Israel (25%) and the US. The US–Israel tax treaty and foreign tax credits generally prevent double taxation, but the calculation is complex. Use a CPA experienced in US–Israel cross-border tax.
Estate and gift tax
Israeli property owned by a US person is included in their US taxable estate. Proper structuring — sometimes through an Israeli company or trust — can mitigate exposure. Plan this before you buy, not after.
The Israeli side
What's different for American buyers in Israel
Purchase tax: 8% flat
Non-resident Americans pay 8% purchase tax on the full property value. This is the same rate as all other foreign buyers. There is no US–Israel treaty provision that reduces this.
Mortgage: up to 50% LTV
Israeli banks will lend to US citizens at up to 50% LTV. You'll need US income documentation (W-2s, tax returns, bank statements). Some banks have dedicated international mortgage desks.
Power of attorney
Most American buyers complete the purchase without travelling to Israel. Your Israeli attorney can act under a notarised power of attorney, which can be executed at an Israeli consulate in the US.
Currency transfer
Transfer USD directly to your attorney's client account. The conversion to NIS happens at the time of payment. Using a specialist FX provider (rather than a bank wire) typically saves 1–2%.
Our US presence
We're on the ground in the US too
Bibian Group maintains licensed real estate offices in Los Angeles and New York. You can meet with us in the US before you travel to Israel — or handle the entire process from home.
American buyer FAQs
Questions American buyers ask most
Can I use my IRA or 401(k) to buy Israeli real estate?
A self-directed IRA can hold foreign real estate, but the rules are strict. The property cannot be used personally, and all expenses must be paid from the IRA. Consult a self-directed IRA custodian and a cross-border CPA before proceeding.
Is there a US–Israel tax treaty?
Yes. The US–Israel income tax treaty (1994) covers income taxes, including rental income and capital gains. It generally prevents double taxation through foreign tax credits, but does not reduce Israeli purchase tax.
What if I make aliyah after buying?
New olim (immigrants) receive significant tax benefits, including a 10-year exemption from Israeli tax on foreign-source income and reduced purchase tax rates. If aliyah is in your plans, time your purchase carefully.
Can I buy in a US LLC or trust?
Yes, but the Israeli and US tax implications differ significantly depending on the structure. An Israeli attorney and a cross-border CPA should review the structure before you proceed.
How do I find a good cross-border CPA?
We maintain relationships with several US–Israel cross-border tax advisors and can make introductions. This is one of the most valuable referrals we make — the right CPA can save you far more than their fee.
American buying in Israel? Let's talk.
We're licensed in both the US and Israel. We understand the full picture — the Israeli process and the US reporting obligations — so you don't have to piece it together yourself.
Schedule a consultation