The agreed price is not the amount that reaches you. Three things sit between the two numbers, and none of them is mentioned in the presentation.
Hadar sat across from me as I showed her the final number, and she said nothing for a long time.
Then she said: “Is that all that's left?”
“That's what lands in your account in Israel.”
“But I sold for more than I bought.”
“True. The question is how much more, and what happened to it along the way.”
Hadar came to Romania with money that had a story. It was money she received in a divorce settlement, and for her it wasn't an investment. It was the closing of a chapter. She didn't want it sitting in a checking account and slowly disappearing. She wanted it to work.
She also didn't want to deal with anything. That was her starting point, and she said it up front in every conversation. She has no time, no knowledge of construction, and no desire to learn. What she wanted was a finished product.
And she found exactly that. A company that does everything. Buys for her, renovates, furnishes, finds a tenant, collects, transfers. She signed, wired the money, and received photos of a ready apartment she had never been inside.
For three years it worked. The rent arrived every month, more or less on time. No big surprises. When she told her friends about it, she said it was the best decision she had made in that period, and that was true.
Then she wanted the money.
The first gap appeared when we put the apartment up for sale, and the offers that started to arrive were lower than she had assumed. Not by a lot, but there was a gap.
We checked what had been selling in the area. And then it began to become clear.
She had bought at a price that included everything she bought. Not only the apartment, but also the renovation, the furniture, the sourcing, the hand-holding, the Hebrew-language service, the fact that she didn't have to do anything. There is a name for this in the market and it is neither a compliment nor an insult: a foreigner premium. You pay more because you bought a product, not a property.
It is a legitimate price, and she received exactly what was promised in return. The problem is that on the day of sale, you can't sell the service. You can only sell the apartment. And so the profit didn't start from where she thought it started.
The second gap came when we went over the calculation.
“How much tax do I pay there?” she asked.
“That's the right question, but it isn't the only one. You are an Israeli resident. You owe tax in Israel on capital gain even when the property is not here.”
“Even if I've already paid tax in Romania?”
I explained. Section 91 of the Income Tax Ordinance provides that an individual is liable to tax on real capital gain at a rate not exceeding 25%. That is the relevant rate for her. There is a mechanism meant to prevent double taxation, and tax paid abroad can, under certain conditions, be credited against the tax in Israel. But that mechanism does not erase the liability. It only keeps you from paying twice on the same profit.
I added one more thing, because she asked. There are income levels at which a surtax (mas yesef) applies, and since 2025 it also applies to income from capital sources. In her case it wasn't relevant, and she breathed a sigh of relief when I said so.
And then I told her what really surprised her. That there is a duty to report within thirty days of the date of sale, and that in many cases an advance payment is made already at that stage.
“30 days? I haven't even seen the money yet.”
“That's exactly the point. The Israel Tax Authority's timetable doesn't wait for your bank's timetable.”
“That's something nobody mentioned,” she said.
Not out of malice. It's just that whoever marketed the deal to her didn't speak with her about what happens in Israel at the end, consciously or not.
And the third gap was the one for which no one can be blamed. The euro was not where it had been when she bought. She thought in shekels, bought in euros, and sold in euros. Three years later, the same amount in euros simply turned into fewer shekels.
Three things. None of them is fraud. Together they ate most of what she thought she had earned.
She was in shock. She told me she needed a day to think.
She called the next day and said she was selling.
I asked her why. I could have understood a different decision too. The property produces income. There's no real pressure. She could wait.
“Because I don't want to stay because of the number,” she said. “If I discovered this today and decided afresh, I wouldn't have gone in. So I don't want to stay just to avoid looking at that number.”
It is one of the most mature answers I have heard in recent years, and I think about it a lot.
She sold. The money came in. It was smaller than she had expected, and it was hers, with no track that she hadn't chosen.
The question I would ask in your place
- How much of the price I'm paying is the property, and how much is the service I won't be able to sell?
- What is left to me after tax in the country, tax in Israel, and an exchange rate that can move in both directions?
- Did someone on my side check this calculation before I signed, and not after?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית