Last updated: September 2026
Combination deal
In short: A 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.
In short
Instead of selling the plot for money, the landowner "splits" with the developer: the developer builds, and the owner gets a share of the built units. The owner thus enjoys the land's uplift without investing money in construction.
The professional explanation
The combination ratio (say 40%-60%) is set by land value, construction costs, building rights and developer profit. An appraiser represents the landowner in setting the ratio.
Types: a "regular" combination (selling part of the land for construction services), a proceeds deal (selling all the land for a share of receipts) and mixed structures. Tax matters greatly: capital gains tax on the sold portion, the developer's purchase tax, and the deemed sale date.
Protections for the landowner: performance guarantees, bank project finance, a schedule with sanctions, a detailed technical specification, a caveat and a mechanism to unwind the deal on breach.
Example from the field
A Hod Hasharon family held a plot with rights for 4 units. Instead of selling, they signed a combination: the developer built 4 houses, the family received 2 of them built, and sold one at a price well above the value of the whole plot.
Frequently asked questions
Pros and cons of a combination deal for a landowner?
Pros: sharing in the uplift without capital, a built product rather than taxed cash. Cons: dependence on the developer, a long time to realisation, execution risk, tax and contract complexity. Legal and appraisal support is essential.
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Afik Hanahal