Friday was a light news day, the way the end of an Israeli work week usually is, and no fresh price or rate number came out. But two things are worth your time. In the north, Haifa took a big formal step: its planning district deposited a single citywide renewal plan that could add up to about 30,000 new homes with safe rooms, meant to replace the old national reinforcement plan (TAMA 38) that just lapsed. And a sharp analysis in Globes answered a question buyers keep asking, which is who is actually buying all the new apartments that are not selling. The short answer is large rental funds that pay a tiny fraction of the tax an ordinary second-home buyer pays.
Two quick numbers we worked out (check them): on a 2 million shekel apartment, an individual buying a second home pays 8 percent purchase tax, which is 160,000 shekels, while a rental fund pays 0.5 percent, which is 10,000 shekels. That is a 150,000 shekel gap on one apartment, so the private investor’s tax bill is 16 times the fund’s. More on both stories below.
The backdrop we already track (markers only): the last official reading still has apartment prices down about 1.3 percent on the year, the long split we cover in why the market is splitting, not crashing, while rents keep rising. The Bank of Israel decides on interest rates this Monday, July 6, at 16:00, with the rate sitting at 3.75 percent since late May. The next official price index lands Wednesday, July 15. The 11th discounted housing lottery is still not drawn: registration closed July 1 and the ministry is still checking eligibility.
Haifa deposited its biggest renewal plan yet: up to 30,000 fortified homes
The largest thing to move on Friday was in Haifa. The city’s district planning committee formally deposited plan number Haifa/2666, a single citywide urban renewal plan, which means it is now published for the public to file objections. This is not final approval, but it is the stage that turns years of drafting into a live plan with a clock running.
The plan is unusually broad. It sets a potential of up to about 30,000 new, fortified apartments across Haifa, meaning homes built with a safe room (mamad). It is designed to replace TAMA 38, the national earthquake reinforcement plan whose validity lapsed in May, and it applies to the city’s older housing stock, buildings put up before 1984 that need strengthening. Owners get two routes: knock the old building down and rebuild bigger, or reinforce it and add floors. The Government Authority for Urban Renewal, which promoted the plan with Haifa’s local committee, called it the largest and most complex building renewal plan in the country.
One detail makes this more than paperwork. Haifa/2666 is a detailed plan, the kind you can pull a building permit straight from, without going back for another layer of zoning approval first. In renewal, that missing layer is often where projects die, so building permits landing directly is the real accelerant here.
Our figure (check it): 30,000 homes is a large number to picture. At roughly 3 people per household, that is housing for about 90,000 residents (30,000 times 3), which is a meaningful share of a city Haifa’s size. Read it as a ceiling the plan makes legally possible over many years, not a count of homes coming soon.
Why it matters: if you own an aging Haifa apartment, this is the framework that decides whether your building can be rebuilt or reinforced, and it just opened for objections, so this is the window to read it and speak up. If you are a buyer or investor, it signals that Haifa is trying to unclog renewal at the city scale rather than one building at a time, which is a different bet from the project-by-project deals in Haifa’s earlier renewal drive. Keep the stage in mind: deposit starts the objections, it does not start the cranes.
Who is buying Israel’s unsold apartments? Funds that pay 0.5 percent tax
Israel has a growing pile of finished apartments that are not selling. A Globes analysis by Dror Marmor on Friday put a face on the buyer stepping in to soak them up, and it is not the young family the discounts are aimed at. It is institutional rental funds, and they are buying with a large tax advantage handed to them by the state.
Here is the gap. An individual buying a second or investment apartment pays a purchase tax of 8 percent from the first shekel (up to about 6.05 million shekels, then 10 percent above that). That 8 percent rate is a temporary measure the finance committee has extended to December 31, 2026, after which it is meant to fall back toward 5 percent. A real estate investment trust, a REIT, buying the same apartment to rent it out pays just 0.5 percent purchase tax, and Marmor notes it also carries exemptions on VAT, corporate tax, and capital gains. Same apartment, very different bill.
The example in the piece is concrete. Mogurit, a listed residential rental REIT set up in 2016 as part of the state’s push to build a professional rental market, bought 44 newly built, unsold apartments in Kfar Saba in May and another 32 in Netanya in June, to hold and rent. We are not restating Marmor’s framing as fact, but the tax rates and the purchases are checkable, and the shape is clear.
Two figures we worked out (check them): take one 2 million shekel apartment. The individual investor’s 8 percent is 160,000 shekels of purchase tax; the fund’s 0.5 percent is 10,000 shekels. The fund saves 150,000 shekels on that single home, and its tax bill is one sixteenth of the private buyer’s. Now scale it to Mogurit’s own two months: 44 plus 32 is 76 apartments, and at roughly 150,000 shekels of tax advantage each, that is about 11.4 million shekels of purchase tax edge on those 76 homes alone (76 times 150,000).
Why it matters: if you are a would-be first-home buyer, this is why the unsold stock you keep reading about may not translate into a bargain for you: a buyer who pays sixteen times less tax can outbid you for the same flat. If you are a renter, more of these homes end up as long-term rentals owned by patient funds, which is exactly the professionally managed rental supply the state has been trying to grow, explained in how Israel rewrote its rules to get rentals built. And if you are an investor, note the calendar: the 8 percent penalty on your second home is scheduled to ease after this year, which is the tax backdrop we lay out in the purchase tax freeze explainer. This is the quiet financing story we keep pulling at in how financing is holding this market up.
What we checked and left out
A light day means being honest about what did not clear the bar, not padding the page:
- An 18 percent apartment discount. A report said ministers want to revive a zero-VAT break, an 18 percent cut on a first new home. It is a floated proposal tied to a future election pitch, not a decision, and it lands on the crowded discounted-housing beat, so we are not treating it as news yet.
- A REIT-style deal on Demri’s renewal arm. A filing about Ybox taking about half of Demri BaIr for 58 million shekels is the closing of an agreement first signed back in July 2025, not a new deal, so we left it out to avoid dressing up old news.
- Migdal and Tidhar. The insurer Migdal’s 325 million shekel bet on a private developer, and the Tidhar chief’s claim that real prices fell about 20 percent, both already ran in our July 2 and July 3 briefs, so there is nothing new to add today.
Dates to watch
- Monday, July 6, 16:00: Bank of Israel interest rate decision, with a fresh staff forecast. The rate has held at 3.75 percent since late May. Full schedule in our 2026 rates and inflation calendar.
- Now open: the objections window on Haifa’s 30,000-home renewal plan (Haifa/2666). If you own a pre-1984 Haifa building, this is the time to check whether you are in it.
- Wednesday, July 15, 18:30: the next official home price index, covering April to May.
- Still pending: the 11th discounted housing lottery draw. Registration closed July 1 and eligibility checks are ongoing, so no winners yet.
- December 31, 2026: the date the 8 percent investor purchase tax is set to sunset, after which it is meant to ease back toward 5 percent unless the law is changed again.
