Afik HanahalReal estate glossary
Plain and professional explanations of the terms you meet in every Israeli real estate and land deal.
TABA (Town Building Plan)A TABA (Tochnit Binyan Ir) is Israel's statutory town planning scheme: it sets what may be built on each plot - land use, building rights, height, setbacks and permitted uses.Building rightsBuilding rights are the volume of construction a plan allows on a plot: main and service areas, floors, site coverage, building lines and the number of housing units.Tabu (Land Registry)Tabu is the common name for Israel's Land Registry, where rights in land are recorded. A Tabu extract shows who owns a property and which liens and notes are registered on it.Block and parcel (Gush / Helka)Block (gush) and parcel (helka) are the identification numbers of land in Israel: the block is a survey area and the parcel a land unit within it. They are used to pull a Tabu extract and planning data.Private landPrivate land is land registered in full private ownership in the Tabu, unlike most land in Israel, which is state-owned and managed by the Israel Land Authority under long leases.Agricultural landAgricultural land is land zoned for agriculture in the statutory plan. Housing cannot be built on it without rezoning, and buying it as an investment is a bet on future planning.Land thawing (rezoning of agricultural land)"Land thawing" is the colloquial Israeli term for rezoning agricultural land to buildable land. It is a statutory planning process, not an event - so "land in thawing" is a claim that needs checking.Rezoning (change of land use)Rezoning is the approval of a new plan that changes the permitted use of land - for example from agriculture to housing or from housing to commerce. It is the core of a land developer's work.Local Planning and Building CommitteeThe local planning and building committee is the municipal body that issues building permits, hears plans within its authority, collects betterment levies and enforces building laws.District Planning and Building CommitteeThe district planning and building committee is the district-level planning body that approves local outline plans and substantive detailed plans, including rezoning, and hears appeals.Vatmal (National Committee for Preferred Housing Sites)The Vatmal is a national committee created in 2014 to fast-track large residential plans on sites declared "preferred housing sites". Vatmal plans have rezoned extensive agricultural areas, including in the Sharon.Building permitA building permit is the local committee's official authorisation to build, demolish or alter a structure in accordance with the applicable plan. Building without a permit is a criminal offence.Betterment levy (Heitel Hashbacha)The betterment levy is a payment to the local committee of 50% of the rise in land value caused by approval of a plan, relief or non-conforming use. It is paid on realisation: sale or building permit.Capital gains tax on real estate (Mas Shevach)Mas Shevach is the tax on the gain from selling a right in land in Israel. The basic rate for individuals is 25% on the real gain, with an exemption for a single qualifying residence up to a ceiling.Purchase tax (Mas Rechisha)Purchase tax is paid by the buyer of a right in land in Israel. A single home enjoys exempt and reduced brackets; an additional home, land and plots are taxed at higher rates, 6% on land.Real estate developerA real estate developer identifies an opportunity in land or property, assembles the rights, leads planning and licensing, finances and manages the project and carries the risk - from idea to delivery.Building contractor (registered contractor)A building contractor performs construction work under contract. In Israel, work above a certain value must be carried out by a contractor registered in the Contractors' Register with the appropriate classification.Construction supervisorA construction supervisor is a professional on the client's side who verifies that the contractor builds to the drawings, specification, standards and contract, approves invoices and tracks schedule and quality.Combination dealA combination deal is a transaction in which a landowner sells a developer part of the land and receives construction services in return - apartments or houses built on the part they keep - instead of cash.Purchase groupA purchase group is an association of private buyers who buy land together and build on it themselves, through an organiser, instead of buying apartments from a developer. The upside is potential savings; the downside is that risk shifts to the members.Exclusivity (exclusive brokerage agreement)Exclusivity is an agreement in which a property owner appoints one broker to market the property for a set period. In return the law obliges the broker to carry out genuine marketing actions, and the seller gets focused, accountable marketing.Brokerage feeThe brokerage fee is the payment to a licensed real estate broker for brokering a deal. Israeli practice: about 2% + VAT of the sale price from each side, and one month's rent + VAT for rentals. Payment requires a written order and the broker being the effective cause.Memorandum of understanding (Zichron Dvarim)A Zichron Dvarim is a short document signed before the contract to "close" a deal. In real estate it can be a fully binding contract with tax and legal consequences - which is why many advise not signing one without a lawyer.Caveat (Hearat Azhara)A caveat is a note registered in the Tabu stating that the rights holder has undertaken to carry out a transaction in the property. It protects the buyer against a conflicting deal until ownership is transferred.Real estate appraiserA real estate appraiser is a licensed professional who values properties and land, checks planning and legal status, and prepares valuations for mortgages, tax, betterment levy and transactions.Yield in real estateYield is a property's annual income relative to its price, in percent. Running yield (gross/net) is measured from rent; total return adds value appreciation. Land has no running yield - all profit comes from uplift.Boutique projectA boutique project is a small, high-quality residential project - usually a low-rise building with a limited number of apartments or a cluster of houses - emphasising design, specification and privacy.Detached house (ground-attached)A detached or "ground-attached" house is a home on its own plot: a single house, semi-detached, terraced cottage or villa. Its value derives from the land and building rights as much as from the house itself.PenthouseA penthouse is an apartment on a building's top floor with a large roof terrace, usually the only unit on the floor. A "mini-penthouse" is a high-floor apartment with a large terrace that is not on the top floor or not the only unit.Urban renewalUrban renewal is the umbrella term for tracks in which old buildings are demolished and rebuilt or reinforced and extended, usually financed by a developer who receives additional building rights. The main tracks: pinui-binui, TAMA 38 (now ended) and its local alternatives.TAMA 38TAMA 38 was a national outline plan for earthquake reinforcement that granted additional building rights in exchange for reinforcing and extending, or demolishing and rebuilding, old buildings. It has expired, and municipalities approved alternative plans.Pinui-Binui (evacuate and rebuild)Pinui-binui is an urban renewal track in which a compound of old buildings is entirely demolished and rebuilt at higher density. Residents receive new apartments, and the developer finances the project from selling the additional units.