יום חמישי כ"ח בכסלו תשפ"ב 02/12/2021
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How much does it really cost to move to a new home?

How much does it really cost to move to a new home?

Think things through properly; moving house can cost approximately 10% of the value of the new property – below is a detailed accounting:

N. Bat Menachem 09/11/2009 12:39

Many house buyers do not take into consideration the additional substantial costs that are an inseparable component of buying a property and moving into it. The solution? Make a detailed financial accounting at the time of purchase, taking into consideration all additional expenses. A special assessment prepared by the department for land assessment in the EMI Insurance and Loans company, confirms what we all intuitively feel – it isn’t cheap to move house. Moving to a new home brings with it many expenses, especially those incurred when modifying the specifications of the new abode to the particular demands of its new owners.

The EMI assessment determined that the cost of moving house amounted to between 7 and 11% of the cost of the new home purchased. The necessary expenditures which could not be eliminated amounted to between 5 and 6% of the value of the property, but in general, many additional costs were also incurred, beginning with renovations, which could cost from 8,000 shekels for a three-room apartment – to repair or installation of air conditioning, new kitchen units and appliances, purchase of new furniture, piping, plumbing and more – which all cost significant sums of money.

The assessment investigated the necessary expenditures associated with purchase of a new or second-hand property, taking into account expenses such as lawyer’s fees, purchase tax, days of absence from employment, light renovations, broker’s fees, processing of a mortgage application and more. In many cases, these costs that fell to the purchaser were not taken into consideration in advance, or were not properly calculated at the time of purchase of the property. Wisely calculating these expenses in advance and setting aside money to cover them enables the family moving to adequately deal with all the expenses without being surprised at all the attendant costs of moving for which they had not budgeted.

Following is a list of costs grouped according to where they appeared in the EMI assessment:



1) Property tax

If the transaction relates to a single property (according to the legal definition of the property tax authorities), the taxing will be as follows:

Up until a sum of 1,026,660 shekels, 0% tax is levied.

From 1,026,660 to 1,442,870 shekels, 3.5% tax is levied.

From 1,442,870 shekels upwards, 5% tax is levied.

Whoever purchases an additional property under his name, will be levied in either the 3.5% or the 5% tax brackets for both properties.

(These figures are true as of the 16th January 2009 until the 15th January 2010. Tax bracket figures are adjusted once a year according to changes in the rate of inflation and the cost of living.)



2) Brokerage fees

Usually, brokers take a rate of between 1 and 2% plus VAT of the value of the property purchased, according to the agreement made in advance of the transaction.



3) Lawyer’s fees

Between 0.5 and 1.5% plus VAT of the value of the property, according to the agreement made in advance of the transaction.



4) Sundry fees

Registration with the Land Registry – 150 shekels.

Deposit on the property – approximately 160 shekels.

Solicitor’s fees – approximately 250 shekels.

Assessment of the value of the property – approximately 400 shekels.

Registration with the Israel Lands Authority / Keren Kayemet LeYisrael – approximately 160 shekels.



5) Processing of loan application

0.25% of the value of the mortgage requested. For example, for a loan request of 500,000 shekels, the bank will take a fee of 1,250 for opening a file to process the loan. (This can sometimes be negotiated .)



6) Utilities payments (for connection to the electricity grid, for water and gas connections).

Can amount to 4,500 shekels for a new apartment, approximately half this amount for a ‘second-hand’ apartment.



7) Moving expenses

Between 1,500 and 2,000 shekels for a basic removal service. This price can rise significantly if other services are added to the basic removal service, such as provision of packing cases, disassembly and reassembly of closets, additional payments for each storey ascended/descended etc..



8) Leave from employment

Approximately 400 shekels per day of work taken off. Usually people request between 3 and 4 days off work, amounting to a total of between 1,300 and 1,500 shekels.



9) Renovations to the apartment before moving in

If renovations are required, they run the gamut from cleaning only, which can cost around 1,000 shekels, through painting which can cost around 4,000 shekels and upwards, through extensive renovations which can cost anything up to 30,000 dollars for an apartment worth 900,000 shekels. The average apartment will require approximately 35,000 shekels worth of preparatory work if proper renovations are required.



10) Purchase of furniture for a new apartment

This includes clothes closets, living room furniture, bookshelves and bookcases, kitchen units, carpeting and lighting. Obviously these depend on the particular needs and the budget of the family in question. When the purchase is of a first home, everything will need to be purchased from scratch, and the furnishing of an entire apartment can cost anything from 50,000 shekels upwards.



11) Air conditioning

The cost of installation for a central air conditioning unit for a three-room apartment can reach 10,000 shekels and upwards.

In conclusion, when moving to an new apartment, there are many considerable and unavoidable expenses such as lawyer’s fees, property tax, processing of a loan application, days off work, brokerage fees, removal firm payment, and also connection to utilities (gas, water, electricity). In most cases, there are also additional costs relating to the refurbishment of the apartment, purchase of furniture and household appliances, installation of air conditioning etc.. All these combined costs can add up to 11% of the value of the apartment purchased. Financial planning is advisable and careful consideration of all the myriad details is advised for the person moving – all this is important in order to avoid heavy and unforeseen costs which are very difficult to deal with if they are not prepared for in advance.

At EMI they advise purchasers to take into account at the time of taking out a mortgage, all the attendant costs of purchasing a property, in order to move into the new apartment with peace of mind.

Yishuv Tov