New Law: Cash and Real Estate Transactions
This new law about cash and real estate transactions has come in to play recently, changing the way real estate transactions are made. Below are the basic rules which apply to this new law:
- When renting an apartment in Israel, payment to a realtor in cash is limited to NIS 11,000. Any transaction above this amount can only be paid 10% in cash.
- Receiving a cash gift is limited to NIS 50,000. However, this limit does not apply to gifts given directly from close family members.
- Penalties of 15% – 30% can be fined to both the recipient and the payee if they don’t follow the limits.
- The above-mentioned sums are including VAT.
- If there is a transaction that involves partners, the limit is on the transaction and not on the number of parties. If there is a fine, it will be divided between them.
- This law applies also to apartment rental payments as well. The sum of the agreement goes according to the method of payment. If the tenant is paying rent monthly, then the sum of the deal is the monthly figure. If the tenant pays in advance the transaction amount is the amount paid in advance.
- According to this law, one cannot leave an open check of more than NIS 5,000.
***Important note: When closing any deal with cash payment transactions, we highly suggest and recommend speaking with a qualified Israeli accountant and lawyer.
If you are looking for an apartment to rent or buy in the Jerusalem or Netanya areas, our agents are qualified and ready to assist. Don’t hesitate. Contact us today!