Is rent with option to buy possible in Israel?

I am often asked by American clients if there is a possibility for a rental with option to buy.  This type of deal is very rare to non-existent in Israel since an owner has to pay sales or capital gains tax even if it is “with option”.  Nearly all sales are clean deals without creative financing in Israel unless an unusual arrangement can be made with a specific owner.

I have done one such property deal when the market was slow in Israel in the 2000-2004 recession.  Even when I worked in the USA in a very strong market in the early 90’s such deals were almost nonexistent in a sellers market.

The mortgage and banking industry has remained strong in Israel due to strict guidelines, but a 90% mortgage is available to qualified buyers. The ISrael property market is strong and growing stronger so rentals and sales fall into their respective categories strictly.

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