2013 was an excellent year for the property market in Israel, with average house prices adding some serious gains. Things were up by a full 12.7 per cent in Tel Aviv, Gush Dan topped the table with an impressive 15.2 per cent gain and property prices in the Southern District also increased by more than 10 per cent. Rental yields remain relatively low however, averaging no more than about 3.8 per cent or so even in the heart of the capital. Short-term rents have traditionally proven more agreeable than longer lets. Tax rates are also comparatively low, with rental income tax being capped at 10 per cent and capital gains tax not applying to the vast majority of properties. Of course, the on-going conflict in many areas of Israel does little for overall stability, but it’s not to say that property investment cannot be rewarding.