Buying in Israel From Abroad? The 7 Hurdles Everyone Is Facing

For Jewish families in the diaspora, buying in Israel is now often a decision made with the heart, but the numbers still have to work. Rising antisemitism, political uncertainty, and a renewed sense of belonging have pushed aliyah and foreign purchases higher. The hard part comes next: a home abroad that hasn’t sold, money that has to cross borders, a strong shekel, investor-level taxes, restrictive mortgages, choosing a city and managing it all from thousands of miles away. This article looks at each hurdle and how buyers can plan around it.

The data shows a community on the move. In the first quarter of 2026, according to the Finance Ministry’s Chief Economist Division, foreign residents bought about 500 apartments in Israel. American passport holders accounted for nearly half of them, about 238 apartments, and more than half of those were in Jerusalem. British buyers increased their purchases over the same period, and French buyers continued to grow as well. Since October 7, interest in aliyah has risen across the English-speaking world, with more files opened in the US, Canada and the UK than in the years before the war.

Behind each of those transactions there is usually a family that worked through several obstacles first. Some are financial, some are bureaucratic, and some are emotional. For diaspora Jews planning a move, or a home to move to later, knowing these hurdles in advance is the best way to avoid a costly mistake.

1. The Home You Haven’t Sold Yet

For most families, this is the biggest obstacle. The down payment for an Israeli apartment is usually sitting in the house they live in now, in New Jersey, London, Johannesburg, or Melbourne. Few families can afford to carry two homes, so they face a difficult choice. They can sell first and risk renting in between, arriving with cash but no home and settling for whatever is available. Or they can buy first and risk owning two properties if the sale abroad drags on or closes below expectations.

Some Israeli developers have started to address this. They offer short-term bridge financing for the down payment, or deferred-payment plans where a small share is paid at signing and most of the price at handover, which can be a year or more away. These options can be very useful, but buyers should check the terms. What happens if the sale abroad hasn’t closed by the deadline? Is the convenience built into the price?

Many projects, however, offer nothing like this, and that doesn’t necessarily mean the door is closed. Developers often have more flexibility than their price lists suggest, especially in a slower market where they are working hard to attract buyers. A good advocate on the buyer’s side, someone who knows the market and how developers think, can sometimes put together a creative proposal. That might mean a payment schedule tied to the sale abroad, a longer gap between signing and the second payment, or a different balance between price and terms. Not every proposal will be accepted, but some are, and the buyer only finds out by asking.

2. Getting the Money Out

Selling the house is only half of it. The money then has to get to Israel. Large international transfers go through anti-money-laundering checks on both sides, and Israeli banks must verify where the funds came from before accepting them. That means documents: the sale contract, bank statements, and sometimes proof of how the original property was bought, or records of an inheritance or business sale. Families who collect these early can save weeks of delays.

There is also a newer and less tangible worry. Among diaspora Jews in the US, the UK and elsewhere, people are openly discussing whether governments might one day limit or penalize transfers to Israel. The fears include caps on how much can be sent, extra taxes, tighter reporting requirements, and penalties on assets held there. They reflect a broader sense that the political mood toward Israel is changing in parts of the West. France, with its 2027 presidential election approaching, is feeling these concerns especially strongly.

No such restrictions currently exist in the US, the UK, or Australia, and nobody can predict what future governments will do. South Africa is a different case: it already has exchange controls, with annual allowances and tax-clearance requirements for moving larger sums abroad, and South African buyers need to plan their transfers carefully. Everywhere, though, the fear is changing behaviour. Many families are moving up their timelines, and some are transferring funds in stages as a precaution. Early advice from a cross-border tax adviser in both countries is essential.

3. The Currency Squeeze

The strong shekel has hit overseas buyers hard. The dollar fell to around NIS 3.04 just before Israel’s recent election. It recovered to about NIS 3.1 as the uncertainty of the vote count weakened the shekel, but that is still far below the levels buyers were used to only a few years ago. The pound and other major currencies have felt similar pressure. In practice, a family selling a home abroad brings significantly less purchasing power to Israel than it would have recently.

The Finance Ministry data reflects this: the American share of foreign purchases has fallen from about 60% to 49%, partly because of the weaker dollar. The temptation is to wait for a better rate, but Israeli home prices don’t wait with you. A more practical approach is to convert in stages, to fix rates for known payment dates where possible, and to use the currency services Israeli banks offer to foreign clients instead of a home bank’s standard rate.

4. Taxes That Treat You as an Investor

This catches many families by surprise. Under Israeli tax law, a foreign resident who buys an apartment is taxed as an investor, even if it is the only property they own anywhere in the world. Purchase tax is currently 8% from the first shekel and 10% in the highest bracket. On a NIS 3 million apartment, that is NIS 240,000 before legal and other fees.

Aliyah changes the picture. Olim are entitled to a sharply reduced purchase-tax rate on a home bought within a window that starts one year before aliyah and runs for seven years after it. A family that buys as foreign residents and then makes aliyah within the eligible period may be able to claim back the difference. Recent legislation has also added income-tax benefits for olim arriving between November 2025 and the end of 2026, alongside the long-standing ten-year exemption on income earned abroad. Americans have an extra layer to consider: the US taxes its citizens on worldwide income and requires them to report foreign accounts, even after aliyah. Because the rules and brackets change regularly, get professional advice before signing, not after.

5. Mortgages That Fall Short

Israeli banks are cautious with non-residents. A foreign resident can usually borrow up to 50% of a property’s value, while olim buying a first home can get up to 75%. Banks also tend to count only part of income earned abroad when assessing whether a buyer can repay. The result is often a smaller and more expensive loan than the buyer’s earnings would justify.

Timing can help. In many new-build purchases, most of the price is paid at handover, so the mortgage can be taken out later. If the family has made aliyah by then, they may qualify for olim financing terms. Banks that serve diaspora clients have reported strong growth in mortgage lending to foreign residents, and several have dedicated teams for this market. Speaking to a mortgage adviser who knows these deals before choosing a property will show you what you can actually afford.

6. Choosing Where to Live

For a family moving from abroad, choosing a city is about much more than price. Schools, shuls, the community, employment, and other English-speaking families nearby all matter. Jerusalem remains the first choice for many Anglo buyers. Beit Shemesh, Ra’anana, Modi’in, Efrat and Netanya all have well-established English-speaking communities. Netanya’s appeal to American buyers has grown noticeably, with American purchases there more than doubling year on year in early 2026.

Popular places come at a price. Families on tighter budgets, especially those affected by currency losses, are looking at more affordable cities where an apartment is larger for the money and new Anglo communities are forming. Spending time in a neighbourhood before committing, on a weekday and on Shabbat, is still the best way to choose.

7. Buying From a Distance

Buying a home from thousands of miles away has always been hard, and it has become harder. Flights and the costs that come with every trip have risen sharply, and the war makes travel plans uncertain, yet doing this properly takes time on the ground. The market doesn’t make it easier. It is fragmented, with no central listings, prices that aren’t always transparent, and much of the information only in Hebrew. Overseas buyers are also targeted from every direction, with ads, marketing campaigns, real estate events, and online chatter all competing for their attention. Under that pressure, it can be very hard to know what to buy and to make smart decisions.

That’s why the first step is building the right team: the right lawyer, the right mortgage adviser, and the right tax adviser, led by an experienced advocate on the ground you trust, who can filter out the noise and negotiate for you. Think of it as a journey with a clear goal: take the time to do it right, but don’t let it drag on. For diaspora Jews buying from abroad, the right team is what turns an overwhelming process into a manageable one.

The Bottom Line: Don’t Wait for Perfect

None of these hurdles is a reason to stay away, and together they point to one clear lesson: putting off the decision rarely makes it easier. The currency could move either way, and so could the politics abroad. Israeli home prices, meanwhile, have a long history of rising over time. Families who hold out for the perfect apartment in the perfect neighbourhood at the perfect moment often find that the moment never comes.

That’s why the most practical advice is often the simplest: buy something. It doesn’t have to be your dream home or your first-choice location. It can be a smaller apartment, an investment property, or a home in a more affordable city that you rent out until you arrive. What matters is getting a foothold in the Israeli market and having your money working here rather than sitting abroad. You can always trade up later, but it is much harder to get in once prices have moved further out of reach.

For some families, the bolder move is to sell now. If the market where you live is strong and you have a good buyer with a solid offer, it may be worth accepting it, renting until you’re ready to make aliyah, and putting the proceeds into an Israeli property in the meantime. Markets turn, buyers disappear, and the political climate toward Israel and its supporters is hard to predict. You may find later that your home abroad is harder to sell than you expected, and that when you finally arrive, the home you wanted here is no longer affordable.

Every family’s situation is different, and decisions like these need proper financial and tax advice. But for diaspora Jews who know where their future lies, the cost of waiting is often higher than the cost of acting. Plan carefully, get the right people on your side, and take the first step.