An apartment in Israel whose owner lives in London, New York or Paris behaves exactly like any other apartment. The tenant pays late, the boiler bursts on a Saturday morning, the municipality sends a rates bill, the house committee resolves to refurbish the lobby, and the Tax Authority expects an annual report. The only difference is that there is nobody to open the door.

Most owners living abroad manage in the first year. A relative holds the keys, the tenant pays on time, and it all looks simple. The difficulty starts when something goes wrong: a tenant who stops paying, damage that is disputed, arrears of municipal rates accumulated in the owner’s name, or an assessment issued because nothing was filed. At that point what is needed is authority to act, not someone to check that the apartment is still there.

This page sets out what a let property in Israel actually requires, and what continuing legal representation of a non-resident owner includes.

What needs continuing attention

Finding a tenant, and checking him

The check covers identity, ability to pay, and the fit between the intended use and both the designation of the property and the by-laws of the condominium. An owner abroad cannot hold a meeting, so the check is done through documents and verification against third parties rather than on impressions.

A tenant who makes a good impression is often given an agreement with token security. If he later stops paying, there is nothing to enforce against. The size and character of the security should follow from the risk and from the expected cost of eviction, not from a personal impression.

The tenancy agreement

A residential letting in Israel is governed by the Hire and Loan Law, 5731-1971. Chapter B1, added by the 2017 amendment and known as the Fair Rent Law, applies to residential lettings and restricts certain terms. It requires the apartment to be fit for habitation, allocates responsibility for repairs between landlord and tenant, limits the amount of the monetary security and the grounds on which it may be realised, and places on the landlord some of the payments customarily passed to the tenant. The chapter has exclusions, set out in section 25O, among them a letting shorter than three months, a letting of ten years or more, and an apartment whose rent exceeds the statutory ceiling. Whether the chapter applies to the particular property is therefore checked first. A term contradicting the mandatory provisions of the chapter will not stand, even if the tenant signed it.

Beyond that, the agreement settles the term and the option to extend, the rent and how it is paid, the allocation of the current charges, the arrangements for repairs, and a prohibition on transferring the right to a third party.

Security

Security is what makes the agreement enforceable in practice. The customary instruments are an autonomous bank guarantee, a promissory note signed by guarantors, a personal guarantee from a third party, and a cash deposit. Each carries a different cost to the tenant and a different degree of realisability for the landlord. A bank guarantee is realised quickly but is expensive for the tenant and therefore harder to obtain, while a promissory note is cheap to provide but its realisation requires execution proceedings.

The ceiling in section 25J of the Law applies to security involving a monetary outlay by the tenant, which includes a deposit and a bank guarantee, and it stands at the lower of three months’ rent or a third of the rent for the whole term. A promissory note and a third party personal guarantee are not subject to that ceiling, which is why they are the principal instrument where wider protection is needed. The Law also limits the grounds on which security may be realised.

Collection and transfer to the owner’s account

Collection is managed with the tenant, including monitoring payment dates and identifying arrears at the stage where they can still be dealt with by a letter rather than a claim. Receipts are transferred to the owner’s account on his instructions and documented in a way that allows the full income and expenses to be shown later. Orderly documentation is what allows a tax track to be chosen on the basis of figures, and what allows the filing to be defended if it is questioned.

Transferring rent to a foreign resident also engages the withholding obligation under the Ordinance, and an Israeli bank will not make a transfer abroad without an assessing officer’s certificate or an appropriate declaration. An exemption or reduction certificate is applied for in advance, because in its absence the default rate is withheld. The withholding regulations, the forms used to move the money out, and the filing and refund position are set out in rent paid to a foreign resident.

Choosing the tax track on the rent

Tax is due on rental income in Israel even where the owner is not an Israeli resident. The extent of the reporting obligation, a full annual return or payment alone, follows from the track chosen and from the level of income, and it is examined for each tax year.

The reduced 10% track under section 122 of the Income Tax Ordinance [New Version] sets no residency condition and is therefore open to a foreign resident as well: its conditions attach to the apartment, to the landlord being an individual, and to the income not being business income. The tax is imposed on the gross income with no deduction for expenses or depreciation, subject to a narrow exception that is not relevant to most foreign residents. Payment on this track is required within thirty days of the end of the tax year, and late payment attracts linkage and interest.

The comparison between the tracks, the exemption ceiling, the taxation of a commercial property and the position under the tax treaties are set out on the page on Israeli property tax for non-residents.

Breach and eviction

Where the tenant stops paying or otherwise breaches the agreement, the sequence is a written warning, realisation of the security, and, if the breach continues, legal proceedings. Israeli civil procedure recognises a dedicated route, a claim for eviction from leased premises under the Civil Procedure Regulations, 5779-2018, which is intended to be faster than an ordinary civil claim because it addresses the question of eviction alone and leaves the monetary claim to a separate proceeding.

Even so it is a court claim, with the timetable that implies. Which is why the security taken at signature matters more than any eviction clause in the agreement.

Municipal rates, the house committee and maintenance

Section 326 of the Municipalities Ordinance [New Version] provides that on a letting for a period shorter than one year the landlord is the person liable for municipal rates towards the authority. A contractual agreement that the tenant will pay binds the parties alone and does not transfer liability towards the municipality. Section 325 adds that a holder who ceases to hold a property must give written notice, and in the absence of notice he remains liable. Monitoring the charges, and the replacement of the registered holder at every change of tenant, is therefore part of the work. A rates debt is not itself registered against the property; it is a personal debt. But section 324 blocks the municipal certificate required to transfer the rights, which is why it surfaces precisely at the moment of sale.

A parallel position exists in the condominium. Section 58 of the Land Law, 5729-1969 places the obligation to contribute to the expenses of maintaining the common property on the apartment owner. An internal understanding with the tenant that he will pay the committee does not change the owner’s liability towards the representation, and an accumulated debt may surface on sale. Alongside this, repairs and maintenance are coordinated, within a scope and an approval settled in advance.

The annual reporting

Reporting rental income to the Tax Authority requires accurate figures: the sums actually collected, the periods in which the property stood empty, and the expenses incurred. Those figures are produced by the documentation kept through the year rather than reconstructed at the end of it.

What changes when the person handling it is a lawyer

Most of what is described above is not property management but legal work: drafting an agreement, drafting a letter before action, realising a promissory note, opening an execution file, filing an eviction claim, answering an assessment. Where those are done by someone already qualified to do them, there is no need to hand the file to another party when the matter becomes a dispute and explain the background again. The engagement is also subject to the duty of loyalty and to privilege, which apply to an advocate under the Bar Association Law, 5721-1961.

Against that, legal representation is not a substitute for maintenance services on the ground. The scope of the service, the actions included in it and the actions requiring the owner’s specific approval are settled in writing in advance.

Where to go next

Last updated: 31 August 2026

The content of this page is general information only. It does not constitute legal or tax advice and should not be relied upon in making decisions. The law, the amounts and the brackets change from time to time. Specific circumstances require individual advice.