The Gap Between the Contract and the Bank Account

The agreed price is not the amount that reaches you. Between the two numbers sit three things, and none of them is mentioned in the presentation.

Hadar sat across from me when I showed her the final number, and she said nothing for a long time.

Then she said: "That's all that's left?"

"That's what goes into your account in Israel."

"But I sold for more than I paid."

"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 the money she received in her divorce, and for her it wasn't an investment. It was closing a chapter. She didn't want it to sit in a current account and slowly disappear. She wanted it to work.

She also didn't want to deal with it. 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, transferred the money, and received photos of a finished apartment she had never set foot in.

For three years it worked. The rent arrived every month, more or less on time. There were no big surprises. When she told her friends about it, she said it was the best decision she had made in that period, and it was true.

And then she wanted the money.

The first gap appeared when we put the apartment up for sale, and the offers that started coming in were lower than she had assumed. Not by a huge margin, but there was a gap.

We checked what had sold in the area. And then it started to become clear.

She had bought at a price that included everything she bought. Not just the apartment, but also the renovation, the furniture, the search, the support, the service in Hebrew, the fact that she didn't have to do anything. There's a name for that in the market, and it's neither a compliment nor an insult: the foreigner premium. You pay more because you bought a product, not a property.

It's a legitimate price, and she got 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 through the calculation.

"How much tax do I pay there?" she asked.

"That's the right question, but it's not the only one. You're an Israeli resident. You owe tax in Israel on capital gains even when the property isn't here."

"Even if I already paid tax in Romania?"

I explained it to her. Section 91 of the Israeli Income Tax Ordinance sets the tax on an individual's real capital gain at a rate not exceeding 25%. That's the relevant rate for her. There is a mechanism designed to prevent double taxation, and tax paid abroad can, under certain conditions, be credited against the tax in Israel. But that mechanism doesn't erase the liability. It only prevents you from paying twice on the same gain.

I added one more thing, because she asked. At certain income levels a surtax is added, and since 2025 it also applies to capital income. 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's a reporting obligation within thirty days of the 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 Tax Authority's timetable doesn't wait for your bank's timetable."

"That's something no one mentioned," she said.

Not out of malice. Simply, whoever marketed the deal to her didn't talk to her about what happens in Israel at the end, whether knowingly or not.

And the third gap was the one no one can be blamed for. The euro wasn't 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 a scam. Together they ate up most of what she thought she had made.

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 earns. There's no real pressure. She could wait.

"Because I don't want to stay because of the number," she said. "If I found this out today and decided from scratch, I wouldn't go in. So I don't want to stay just so I don't have to see that number."

That's one of the most mature answers I've heard in recent years, and I think about it a lot.

She sold. The money came in. It was smaller than she expected, and it was hers, with no path she hadn't chosen.