Legal counsel for Israeli investors in US real estate
New York
“The US” is not one market. What works in Florida does not work in Ohio, and what holds true for tax in Texas is entirely different from what holds true in New York. An Israeli investor who enters the American market without deep local knowledge pays an expensive tuition.
- Common holding structureLLC
- ClosingThrough a Title and Escrow company
- TaxFederal and state - different in every state
- Purchasing groupsAn Israeli trustee for the partners’ funds
Why Israelis choose the United States
Israeli investors know the American market, are comfortable with the dollar and seek returns that are hard to find in Israel. The US market allows fast entry and exit, and offers well-developed mechanisms for fix-and-flip, value-add and rental transactions, multifamily and purchasing groups. The challenge is that every state - and sometimes every county - plays by its own rules.
What to know before you enter
- The federal and state tax structure differs from state to state, and what is permitted in Florida does not necessarily hold in New York.
- The holding structure (usually an LLC) must also fit Israeli tax law - otherwise double taxation may arise.
- A sale by a non-resident is subject to tax withholding at source (FIRPTA), and US assets may be exposed to estate tax.
- In fix-and-flip transactions, fast, local due diligence is critical - a single week can be the difference between a deal and a loss.
Three tracks of support in the US
- 1
For investors
Identifying the transaction, due diligence, legal support and closing.
- 2
For developers
Legal structure, partnership agreements and introductions to a local team.
- 3
For purchasing group organizers
A licensed Israeli trustee who holds the partners’ funds and releases them to the Title company only once the conditions are met.
- 4
Structure and tax
LLCs and holding structures that also work under Israeli law.
- 5
Title and Escrow
Working with the Title company to verify ownership and manage an orderly closing.
- 6
Local partners
Lawyers, property managers and financing sources in the target state.
Adv. Ilan Leibovitch is an Israeli attorney. Advice and acts under local law are carried out by lawyers and notaries licensed in the relevant country, coordinated by the office.
How it works in United States
- 1
Structure and tax
Choosing the holding structure under US and Israeli law.
- 2
Offer and contract
A purchase offer and a contract with conditions precedent.
- 3
Inspections and Title
Property inspection, title search and Title insurance.
- 4
Financing
Foreign-buyer financing or equity, depending on the structure.
- 5
Closing in Escrow
Transfer of funds and ownership through the Escrow company.
Why us
Because the US demands two things that are rarely found together: deep knowledge of the American market - how a fix-and-flip transaction really works, what the Title company does and how to build an LLC structure correctly - and the full trust of the Israeli investor. The investor is not sending money to America: they are working with an Israeli lawyer who knows and understands.
Guides · United States
Title Insurance and Escrow in a US Transaction: What Protects You and What Does Not
Title insurance and escrow in the US: what the owner's policy covers, exceptions to check, how the escrow account works and how to defend against wire fraud.A US Property Management Agreement: What It Must Contain, Fees and Common Traps for Remote Investors
A US property management agreement for an investor in Israel: mandatory clauses, customary fees, licensing, withholding on rent for foreigners and common traps.An LLC to Buy US Property for an Israeli Investor: Advantages, the Israeli Reporting Trap and Alternatives
Buying US property through an LLC? The advantages, the US-Israel classification gap, Income Tax Circular 5/2004, reporting duties and alternatives for Israelis.ITIN, EIN and a US Bank Account for a Foreign Investor: What You Need, When and How
A practical guide for Israeli US real estate investors: when you need an ITIN or an EIN, how to apply without an SSN, timing, and US bank account requirements.Rental Income in the US: US Taxation, the Israel-US Tax Treaty, Tax Credit and Reporting to the Israel Tax Authority
How an Israeli resident's US rental income is taxed: 30% of gross or tax on net, the tax treaty, the 15% track versus marginal tax with credit, and reporting.Mortgages for Foreign Nationals in the US: Foreign National and DSCR Loans, Down Payment Requirements and Terms
US mortgage for foreigners: how Foreign National and DSCR loans work, down payment and reserves, prepayment penalties, and what it means for Israeli investors.FIRPTA: Tax Withholding on the Sale of a US Property by a Non-Resident - Rates, Exemptions and How to Get a Refund
Selling US property? Under FIRPTA the buyer withholds 15% of the full price. How it works, when 10% or an exemption applies, Form 8288-B and getting a refund.US Estate Tax for Non-Residents: The $60,000 Exemption, the Risk for Israeli Investors and Planning Options
An Israeli investor with US property faces US estate tax of up to 40% with a $60,000 exemption. What counts as a US asset, the cost and planning options.
Frequently asked questions
Should I buy property in the US through an LLC?
Often, yes - mainly for asset protection. But a US LLC is treated in Israel in a way that can create tax problems if not planned in advance. The decision should be made in light of the law in both countries.
What is FIRPTA?
A US law under which, when a non-resident sells property, the buyer withholds part of the proceeds and remits it to the tax authorities. Any excess can be reclaimed, and in certain cases the withholding can be reduced in advance.
What is the role of a trustee in a purchasing group?
The trustee holds the partners’ funds in a trust account in Israel and releases them to the Title company only once the conditions set in advance are met. This is the investors’ principal protection against premature transfer of funds.
Considering a transaction in the US?
A sound international transaction begins long before signing. A short introductory call will clarify whether, and how, we are the right firm to support you.
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