How do I transfer funds from abroad for purchasing real estate in Israel?
Purchasing real estate in Israel may require transferring funds from your home country to cover the down payment and other costs. While an Israeli bank account is the most common option, alternatives such as money changers or escrow transfers may also be available. The best method depends on cost, convenience, and compliance with banking regulations.
Bank Transfers vs. Money Changers
Israeli banks offer a secure and regulated way to transfer large sums, ensuring compliance with legal requirements and simplifying documentation. However, banks typically charge higher exchange rates and fees, and transfers may take longer due to anti-money laundering checks.
Money changers and foreign exchange services often offer lower fees, better exchange rates, and faster processing times. They also provide the flexibility to choose when your funds are converted into shekels, potentially optimizing exchange rates. However, not all money changers can handle large real estate transactions, and additional verification may be required to meet Israeli banking regulations. It’s crucial to confirm that a money changer can facilitate the transaction smoothly and in compliance with legal requirements.
Israeli Bank Account Requirement
Opening an Israeli bank account is not mandatory but is highly recommended. An account allows you to hold funds in Israel, transfer money as needed, and make payments efficiently. If you don’t open an account, you may be able to transfer money directly to the seller’s lawyer’s escrow account, though this often involves additional verification steps and legal fees. Some money changers that specialize in real estate transactions can also facilitate payments directly to the seller and, in the case of new construction, to the developer according to predetermined payment schedules.
Regulatory and Tax Considerations
Regardless of the transfer method used, Israeli financial institutions require proof of the source of funds. This may include bank statements, property sale agreements, or inheritance documentation. Additionally, large international transfers may have tax implications in your home country, so consulting a tax advisor is advisable.
Timing and Strategy
International transfers can take several days, so it’s important to plan ahead to meet payment deadlines. Many buyers use a combination of methods—leveraging money changers for better exchange rates while keeping funds in a bank for long-term security. Consulting with a real estate lawyer and financial expert can help ensure a smooth and efficient transfer process.
This guide is intended to provide the reader with general information and not to serve as legal or other professional advice. Readers are advised to obtain advice from qualified professionals before entering into any real estate transaction.
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