Last updated: September 2026

Betterment levy (Heitel Hashbacha)

In short: 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.

In short

When a new plan increases the value of your land, the municipality takes half of the increase - not of the price, of the increase. You pay when you sell or when you apply for a permit that uses the new rights.

The professional explanation

The levy is set in the Third Schedule of the Planning and Building Law. Betterment is measured as the difference between land value on the eve of plan approval and afterwards, in an appraisal by the committee's appraiser. It can be disputed through a deciding appraiser or an appeals committee.

Exemptions and reductions exist, including an exemption for extending a dwelling up to 140 m² under certain conditions, and exemptions for public institutions and renewal neighbourhoods. They change, so each case must be checked.

Distinguish: the betterment levy is paid to the local committee; capital gains tax (mas shevach) is paid to the state. Both may apply to the same sale, but the levy is a recognised expense for capital gains tax.

Example from the field

A Ra'anana plot owner sold after a plan added a floor. The committee's appraiser set the betterment, and the levy was half of it. A counter-appraisal for the seller reduced the betterment fixed by the deciding appraiser.

Why it matters in a deal

Estimate the expected levy before setting an asking price; it can be a large sum.
A clearance certificate for the levy is a condition of Tabu registration.
Your own appraiser can reduce an excessive assessment.

Frequently asked questions

Who pays the betterment levy - seller or buyer?

By law, whoever owned the land when the plan was approved, usually the seller at the time of sale. The parties may agree otherwise in the contract, but the liability toward the committee remains the owner's.

How can the levy be reduced?

Check for exemptions, file a counter-appraisal by a licensed appraiser and apply to a deciding appraiser or the appeals committee, within the statutory deadlines.

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