(Including a Simple Way to Delay Huge Taxes and Score Cheap Properties!)
Ever wonder if there are completely legal, under-the-radar tricks that smart Israeli investors use to get ahead in real estate?
There are.
And most people have no idea they even exist.
Today, you’re going to learn three practical, game-changing hacks that can save you thousands of shekels, and even help you buy properties at serious discounts.
Let’s dive in.
1. How to Legally Delay the “Betterment Levy” Tax and Keep Your Cash
What is the Betterment Levy (היטל השבחה)?
In Israel, whenever your property goes up in value because of a government decision, like approving a new building plan or changing the zoning, the local municipality charges you a Betterment Levy.
Here’s the deal:
- The levy is 50% of the increased value caused by the change.
- For example, if your property was worth ₪2,000,000 and after a zoning change it’s valued at ₪2,400,000, you owe 50% of the ₪400,000 increase.
- That’s ₪200,000, straight out of your pocket.
(Yeah, ouch.)
But here’s the hack, you don’t actually have to pay it right away.
How to Postpone Your Betterment Levy Payment
Israeli law (specifically, the Planning and Building Law) says you only have to pay the levy when something called a “Realization Event” happens. That’s a fancy term for one of these three moments:
- You sell the property
- You start using it based on the new plan
- You get a building permit for construction
Until one of those happens, you can legally defer the payment.
What you need to do:
- Write a simple letter to the municipality’s Planning Department.
- Include your property details (called Gush/Helka – think of it like a land “address” inside the land registry).
- Formally request to record your notice that you want the levy deferred.
Once they record it, you’re free to move forward without paying yet.
Why Deferring the Levy is Smart
Instead of tying up ₪50,000, ₪100,000, or even ₪300,000 in taxes right now, you can:
- Renovate your property and increase its rent
- Pay off a chunk of your mortgage early
- Buy another property and grow your portfolio
It’s about keeping your money working for you, not handing it over before you have to.
2. Snagging Bargain Properties at Enforcement Auctions (כינוס נכסים)
What Are Enforcement Auctions in Israel?
When a property owner falls behind on debts, whether it’s unpaid municipal taxes (Arnona), unpaid loans, or court judgments, the Israeli Enforcement and Collection Authority can step in.
They force the sale of the property through a public foreclosure auction.
In Hebrew, this is called כינוס נכסים (Kinus Nechasim).
Why Auctions Are a Goldmine for Smart Buyers
Properties at enforcement auctions are often listed at starting bids way below market value.
Studies show you can sometimes buy for 15–25% under the normal price.
Why?
Because the goal is to sell the property fast, not maximize profit.
And because buyers have to put down serious deposits to bid, there’s less competition from casual shoppers.
How to Find These Auctions
You can find auction listings on Israeli websites like:
- BidSpirit – A major platform that collects enforcement and private auctions.
- KonesOnline – Focused entirely on foreclosure sales.
These sites list:
- Apartments
- Houses
- Shops
- Commercial lots
…all up for grabs, often for crazy good prices.
How to Actually Participate
It’s not as complicated as you might think:
- Register on the auction site (usually free).
- Download the auction brochure (“Tikun Kones”) to understand the property and rules.
- Attend the court-ordered property viewing (don’t skip this!).
- Submit your bid along with a bank check or bank guarantee worth 5–10% of the starting price.
- If you win, you’ll pay the rest within a few weeks and get full legal ownership after court confirmation (this part is called receiving a Psikata – פסיקתא).
Most buyers get full title and keys within 2–4 months.
3. Bonus Tip: Secret Municipal Land Deals Through City Tenders
What Are Municipal Tenders?
Sometimes, Israeli cities sell off pieces of municipal land or old government buildings through public tenders (essentially, government-organized auctions).
It’s called a City Tender (“מכרז עירוני”).
Why Almost No One Pays Attention
These tenders are:
- Usually only posted on the municipality’s own website.
- Barely advertised anywhere else.
- Require patience to sift through.
But if you stay alert and check city real estate or assets departments regularly, you might find building lots or investment properties at prices far lower than anything on the open market.
Think of it like treasure hunting, only for real estate.
TL;DR: (Too Long; Didn’t Read)
If you skipped to the end (no judgment!), here’s the short version:
- Defer the Betterment Levy: Legally delay massive tax payments to free up cash today.
- Buy at Enforcement Auctions: Get properties for 15–25% below market value.
- Monitor City Tenders: Discover municipal land deals few investors even know exist.
Final Thoughts
Investing in Israel’s real estate market is competitive, but the real winners know the hidden paths.
You don’t have to break the rules, hire expensive consultants, or have millions to get ahead.
Sometimes, it’s just about playing smarter than everyone else.
So before you make your next real estate move, ask yourself:
“Am I leaving money on the table?”
Chances are, you could be doing a lot better.
Now you know how.
