In 2014 they came to buy property as “tax havens”. Today the European Jews are buying property in Israel as “security havens”. The desire of European Jews to purchase real estate in Israel is not new. They have been purchasing vacation homes steadily for the past 10 years. In the past, the desire to own a home in the Holy land may have been a spiritual one. Today, many other factors are influencing their decision to buy property in Israel. A notable increase was felt over the last 2-3 years, as tax havens were sought after, due to more stringent tax regulations imposed in their native countries and limitations on American and European bank accounts. Over the past two years, Israeli and European banks have pressured their American clients to either withdraw their money from banks or provide confirmation from the U.S. Internal Revenue Service that the funds on hand have been declared to the tax authorities. The crackdown in the European banking sector on undeclared assets drove them to move their money to safer havens, and Israeli real estate seemed a natural haven. The Foreign Account Tax Compliance Act, which requires banks outside the U.S. to report accounts held by American citizens has caused many people to transfer their assets from bank deposits to the Israeli real estate market. Approximately 300,000 to 325,000 people in Israel have dual U.S. and Israeli citizenship. In addition to those who openly declare their overseas accounts to the American authorities, some, it is thought, have either transferred the funds held here into the names of non-American relatives or have withdrawn the funds and bought real estate in Israel.
Swiss banks are now telling their French, German and British clients that if they don’t confirm that the funds have been declared, they must take their money elsewhere. The crackdown has led clients who have undeclared funds to voluntarily disclose them or find real estate to buy. Following the new banking policy, there was a rise in the number of French, Belgian and German Jews immigrating to Israel. Last year alone, more than 3,300 French Jews immigrated to Israel, an increase of 70% compared with the previous year – and the first time that Jewish immigration from France outstripped that from the U.S.
Although in previous years the financial tax issues caused Europeans to buy homes in Israel, RE/MAX Vision real estate broker , Alyssa Friedland with 25 agents in her Jerusalem office, states that the requests and inquiries from European clients is greater than ever. She states, “In the 20 years in the real estate business in Jerusalem, this is the first time I am seeing such a large wave of inquiries and requests from French and British buyers. Although the wave of Russian Jewry in 2000 may have been greater in numbers, they were primarily renting property or buying in smaller cities or on the outskirts of large cities. This new wave of European buyers are coming with the where with all to purchase in the major cities and with budgets of 1,500,000 nis to 3,000,000 nis. Many of these buyers wont necessarily be living in the property immediately ,states Friedland. “They ask us to find them a property to purchase and then they want us to find a renter for the property for the next few years. They don’t want to give the impression that they are afraid of the anti-Semitism ,or that they are running away” from their country of origin. The buyers usually tell the agent that they want an investment “for now” and that they may want to move to Israel in a few years.
Friedland, who specializes in the Jerusalem market specifically , sees the wave of foreign buyers as another factor that will keep real estate prices high in Jerusalem. The fact that there is not enough land available to build on, combined with strict and lengthy regulations imposed on builders to receive building permits, is creating an ongoing sellers market. High demand will persist until housing supply is increased states Friedland . Currently , the only neighborhoods in Jerusalem that are truly keeping supply and demand relatively even is Har Homa, Gilo, Arnona and Armon Hanatziv ( East Talpitiot). These peripheral areas in the southern part of the city, have become the “suburbs” of Jerusalem and are very popular with young couples and families who cannot afford the high prices closer to the city center. Many foreign buyers are also realizing the affordability of these neighborhoods, and the ability to purchase larger homes at reasonable prices. Har Homa , for example has become very popular with the French Jews, while Armon Hanatziv has attracted a large population of young religious Anglo families ( from North America and England)
If the new government is smart, they will implement easier regulations and shorten the bureaucratic red tape, to allow more construction and more housing all over the country.
Israel is truly a haven for all Jews, whether they come out of choice or out of fear. Now it is up to the government to insure that we have the housing to accommodate them when they arrive!