Selling a Property in Urban Renewal (TAMA 38 and Pinui Binui)

When you sell a flat that is in, or signed up for, a TAMA 38 or Pinui Binui project, check the property rights recorded for the flat and the rights and duties in the resident-developer agreement. What can transfer and whose consent is needed depend on the project stage, the records and the signed documents. The full guide to the programmes themselves is in our overview of urban renewal in Israel; this page answers one question: how do you sell your rights mid-project, and what do you owe the buyer, the developer and the tax authorities when you do?

If you own in a building that has signed and you now need or want out, check which property rights exist, what the project agreement promises, what can transfer and whose consent is required before money changes hands.

What are you actually selling in an urban-renewal flat?

A sale may involve rights in the existing apartment as well as rights and duties under a renewal agreement. The position depends on the project stage, the records and the signed documents. The Urban Renewal Authority describes a Pinui Binui agreement as a contract between a developer and an owner, who undertakes to sell the apartment or some rights in the shared building for demolition and rebuilding. Have your lawyer check the current ownership or rights record, the agreement and any consent or assignment terms before describing what transfers to the buyer.

The two tracks matter to a buyer in different ways. For how each works, see TAMA 38 and Pinui Binui. In short:

• TAMA 38 can strengthen an existing building or demolish and rebuild it. Ask the project’s lawyer how the owners’ rights are recorded and what applies at the relevant stage.
• Pinui Binui involves demolition and rebuilding. The agreement describes the replacement promised to the owner; check its terms and the project’s progress.

TAMA 38 permit routes and transitional arrangements depend on the site and municipality. Confirm which framework applies to the building before describing it to a buyer.

To read the project documents themselves, our step-by-step urban renewal guide for owners explains each stage of a project and the key terms in the agreements owners sign.

If the building is in a declared war-damage rehabilitation area

A different law applies to compounds the government has declared under the War-Damage Rehabilitation through Urban Renewal Law, 2026 (חוק שיקום נזקי מלחמה בדרך של התחדשות עירונית). Besides a rehabilitation deal for a new apartment, each owner in a declared area can sign an exit agreement (הסכם יציאה, heskem yetzia): a sale of all your rights in the flat to the developer for cash, meant to let you buy a replacement home instead of waiting for a new apartment in the project. The Chief Government Appraiser sets the price from the value of a new apartment in the area similar to yours, including its existing floor area (measured under section 3 of the Sale (Apartments) Law, 1973), at values on the day before the war damage. That is the basic price; owners who sign within 95 working days of the declaration get a higher, increased price, explained under selling now or waiting below.

Three rules affect a sale in a declared area:

• Permits freeze. From the declaration, no building permits, land-use permits or subdivision plans can be issued or approved in the area for 60 working days, or until the planning body that will handle the plan sets conditions under section 78 of the Planning and Building Law, whichever comes first.
• You sell clean. The exit price is paid for your rights free of any debt, mortgage, lien or third-party right. You remove them yourself, for example by moving the mortgage to another property, repaying the loan or reaching another arrangement with the lender, and you need written consent from any registered third party. You may use part of the price to clear them, such as paying the debt behind an attachment. Our page on mortgages, liens and warning notes when selling explains how each is removed.
• An unregistered buyer needs more than a warning note. A rehabilitation deal or exit agreement is reported to the Authority, by the developer or by the owner, with a copy of each owner’s ID card and its appendix or a passport, a copy of the signed agreement and proof of ownership that matches how the flat is recorded: an up-to-date Tabu extract, an Israel Land Authority confirmation, or a housing-company confirmation with the Israel Land Authority notice. A buyer whose purchase is not yet registered attaches the sale contract, the seller’s or the seller’s lawyer’s confirmation that the deal was completed and the tax confirmation that it was reported, plus an arnona voucher if they hold the flat. A warning note (הערת אזהרה, he’arat azhara) in the buyer’s favour is not enough on its own.

Sources: the official gov.il guide to the War-Damage Rehabilitation through Urban Renewal Law (updated 22 October 2026) and the Authority’s service for reporting a rehabilitation deal or exit agreement, both checked 29 October 2026. For the full timetable, the appraisal and objection steps and each declared compound, see our guide to the war-damage rebuilding law, its declared areas and owner options.

What must you disclose to the buyer?

Give a buyer the documents needed to assess the property and the project, including the rights records, signed agreement, project stage, developer details and financing information.

Documents to review

1. The signed resident agreement. The contract between the owners and the developer. It defines your future-apartment rights and any transfer or consent conditions.
2. Developer identity and track record. Check who the developer is, its relevant experience and the available information about project financing and performance.
3. The residents’ lawyer. Check whether owners have appointed representation, who pays the legal fees and whom the lawyer represents. Ask for the current project status in writing.
4. Project stage and signatures. Ask which owner consents are required for the relevant step, what has been signed and whether any conditions remain.
5. Plan approval and permit status. Check whether the town plan (taba) is approved, whether a building permit (heter bniya) has been issued and whether project financing is in place. These can affect risk and valuation.

Two more items to check are the guarantees protecting the owners, including how the signed documents deal with them, and, for Pinui Binui, the terms for relocation payments and temporary housing. Review any rent and moving-cost provisions and ask the project’s lawyer whether and how they apply to a buyer. For related security questions, see the pre-completion new-development sale guide.

For a Pinui Binui building, also check where the compound stands in the official renewal process. A place on the Government Authority for Urban Renewal’s map, a preliminary approval and a declaration are different steps. Our guide to how Pinui Binui compounds are declared, approved and funded explains what each status proves, which document shows it and how the state helps projects that do not pay for themselves, so you can tell a buyer exactly which step the project has reached.

What transfers with the flat, and what restricts the transfer?

Review both the rights recorded for the property and the signed project documents. Depending on the agreement and project stage, the sale may also require arrangements for the replacement apartment, temporary housing, guarantees, common-area rights and obligations. Ask the project’s lawyer and the buyer’s lawyer which items can transfer, on what terms and whether consent or replacement security is needed.

The signed resident agreement may include transfer restrictions or consent requirements. Check whether the developer, financing bank or another rights-holder must consent and whether security or other documents must be replaced. Do not promise a buyer that a consent will be granted before checking the documents and obtaining any necessary approvals.

The available record depends on how the property’s rights are registered or managed. Obtain the relevant current Land Registry extract or certificate of rights and have a lawyer check the named rights, entries and any conditions against the property and transaction. Our pages on the Nesach Tabu and certificate of rights and Tabu versus Rami versus chevra meshakenet explain which records to request.

How do you price the new apartment you have not received yet?

The current apartment, its recorded rights, the agreement, project stage and comparable transactions can all affect value. A promised future apartment may be valuable, but check the documents and the risks as well as the present property. For recorded and asking prices by city, see the dated city table in our average rent and costs guide.

Worked examples

The examples below are my own illustrative arithmetic, not a valuation of any specific deal.

Example 1, a hypothetical betterment-levy calculation (my calculation). Suppose a qualifying planning action increases value by NIS 600,000. If a 50% levy applies, the calculation is NIS 300,000; if a 25% rate applies, it is NIS 150,000. These examples assume those rates and no exemption or adjustment. The actual liability, rate and any relief depend on the rights, project and applicable rules. Check the assessment with a licensed professional.

Example 2, a hypothetical project-stage comparison (my calculation). For illustration only, assume a future apartment value of NIS 2,500,000 at delivery, and assign a 90% factor to a permitted, financed project and a 65% factor to a signed project without a permit. On those invented assumptions, the figures are NIS 2,250,000 and NIS 1,625,000, a difference of NIS 625,000. These are not observed market discounts or valuations; actual values and risks vary by deal and area.

Example 3, the cost of a delay (my calculation). If your rights are worth NIS 1,800,000 today and the project slips two extra years, a simple opportunity-cost proxy is 1,800,000 times the Bank of Israel policy rate times 2. At the 3.25 percent rate in force when the earlier edition of this page was written, that came to about NIS 117,000; rerun it with the current rate (3.25%, as of 2026-11-04). It is a plain proxy, not a forecast.

Which risks can sink your number?

Delay, developer failure and tax timing can each affect a sale and a buyer’s assessment. Their impact depends on the project and transaction.

• Delay risk. An ordinary resale’s timing varies with the file, and a renewal project can add planning, permits, financing and construction. Longer waits may affect the value a buyer places on the rights. See why property sales get delayed in Israel for possible closing-stage delays.
• Developer risk. A project may stall if a developer runs out of money, financing changes or required conditions are not met. Check the developer’s position and which guarantees are promised or issued and what they cover.
• Tax timing and clearance risk. A sale can involve tax filings, an assessment and documents needed for registration. A buyer advance on account of the seller’s appreciation tax may apply, subject to the transaction and the applicable rules. The Tax Authority’s voucher service describes its process, including when a buyer may request a voucher. Ask your lawyer which advance and clearances apply to this sale. For more on the conditional rates and voucher process, see why property sales get delayed.

Which taxes apply when you sell mid-project, and what relief is there?

A sale may involve a betterment levy and appreciation tax. The treatment of the sale and any urban-renewal relief depends on the rights, documents and applicable law. For the wider picture, see taxes when selling property in Israel.

Betterment levy (heitel hashbacha) may arise from a qualifying planning-related increase in value and become payable on a realization event. Who is liable, the rate and any exemption depend on the rights and rules applicable to the project; TAMA 38 and Pinui Binui can have different provisions. Check the actual assessment and applicable rules. Our betterment levy guide for sellers covers assessment and disputes.

Mas shevach is land appreciation tax. For the Tax Authority, signing the renewal deal is itself a sale of land rights: in TAMA 38 the owners sell building rights to the developer in return for construction works, and in Pinui Binui each owner sells the old flat to the developer in return for a new one. The law exempts that sale from mas shevach only within set limits. In a TAMA 38 strengthening project the exemption covers only works on the law’s list, such as strengthening, a limited enlargement of each flat and a lift; cash or any other extra counts as payment for a separate right and is taxed. In a TAMA 38 rebuild, the new flat must pass an area or a value test. In Pinui Binui, the replacement flat plus any cash must stay within a value ceiling: the highest of 150% of your old flat’s value without its extra building rights, the value of a 120 square meter flat in the same compound, or the value of a flat there 150% the size of yours, up to 200 square meters. Only the part above the ceiling is taxed. Our guide to tax exemptions for owners in TAMA 38 and Pinui Binui deals sets out each test. Check VAT treatment separately. A seller may also qualify for a single-apartment exemption if the applicable ownership, residence and other conditions are met. Read our pages on mas shevach and the single-apartment exemption before you model your net.

Those exemptions belong to the owner who makes the sale to the developer, so selling your flat to a private buyer partway through needs its own check. Ask your lawyer whether, for tax purposes, your sale to the developer has already happened or whether the buyer will be the owner who makes it and receives the works or the new flat, and how your own sale to the buyer will be taxed. The answer turns on dates that can move. When the deal with the developer is conditional or an option and the Tax Authority was notified in time (Form 7738, signed by the owner and the developer and certified by a lawyer, in TAMA 38; Form 7006, filed by the developer, in Pinui Binui), the sale day is the earliest of the day the condition is met or the option is exercised and the day the works or the building start. A deal that depends on a future plan increasing the building rights can also move the sale day to the day that plan is approved, if all the parties file Form 7751 in time. Settle these points before you agree a price, because they change both your tax and what the buyer is paying for.

Receipts and expenses

Keep receipts for any betterment levy and other sale-related costs. A paid levy may be deductible for mas shevach purposes subject to the applicable rules; check which other expenses are allowed with your adviser. For what lands in your pocket, see what sellers keep after costs.

Should you sell now or wait for the new apartment?

Selling now may meet a need for cash, but the price and any continuing obligations depend on the sale and project terms. Waiting leaves you exposed to project delays and other risks. Compare offers, costs and your financial circumstances with a professional.

For either route, assess the project stage, identify any temporary-housing arrangements and have the lawyers check which consents or documents are required before the sale.

If your flat is in a declared war-damage rehabilitation area

Here, selling now can mean selling to the rehabilitation developer under an exit agreement at the government-appraised price. Compare that price with what an open-market sale would realistically fetch and with the new apartment a rehabilitation deal offers. The date you sign changes the price:

One exception: an owner who, within that window, signed a rehabilitation deal with a developer that was not approved, including an earlier Pinui Binui deal or a deal under a building-strengthening plan, can still sign an exit agreement with the approved developer at the increased price after the window closes.

Before you sign, check how and when you will actually be paid:

• Payment needs an approved developer. The director of the Government Authority for Urban Renewal must approve a rehabilitation developer. That developer must buy the rights of every owner in the area who wants to sell, whether it signed the exit agreement itself or took it over from another developer.
• Payment timing. The approved developer pays within 90 days of its approval or of the plan’s deposit with the planning body, whichever is later. At your request payment can be put off, but not past the evacuation date needed to start construction. The Property Tax Director (מס רכוש, mas rechush) can agree to a later date for delays outside both sides’ control, such as waiting for a lender to release a lien.
• The agreement can become void. If no rehabilitation developer is approved within the statutory period, or the Authority’s director cancels the approval of a developer that did not pay on time, the exit agreement is void and the area can be rebuilt only under the ordinary law, not the rehabilitation law.
• Ask about state financing. The official area notices advise owners to ask whether the developer plans to seek state financing aid, whether it has applied to the Property Tax Director and whether it was found to qualify. If it says it does not want aid, check that it can carry out the project and pay the exit agreements itself within the statutory timetable.

The Authority has published a recommended exit-agreement text (published 9 July 2026, updated 27 August 2026); have your lawyer compare any draft with it. Sources: the official gov.il guide to the War-Damage Rehabilitation through Urban Renewal Law and the Authority’s notice for the Bat Yam Jerusalem A area, which carries the same owner guidance as the other area notices, checked 29 October 2026.

What should you do before you list?

1. Pull your signed resident agreement and find the transfer and consent clause. Confirm whether you can sell and whose written consent you need (developer, lender, or both).
2. If the owners have appointed a lawyer, ask for a one-page status memo: signature percentage reached, plan-approval stage, permit status and financing status.
3. Document the developer’s identity and check which guarantees are promised, which have been issued and what they cover.
4. For Pinui Binui, get the relocation-payment and temporary-housing terms in writing. Check which payments, if any, will pass to a buyer under the project and sale documents.
5. Confirm the current betterment-levy and mas shevach treatment with a real-estate tax lawyer, because the reliefs are statute-driven and TAMA 38 is in flux.
6. Set a price band using the current property, relevant rights, project stage and comparable transactions; be clear about delay risk.

Review the property and project together

Selling mid-project means checking the current property rights as well as the project agreement. The correct sale and transfer steps depend on the documents, the records and the project stage. This page sits in our special situations hub, part of the wider guide to selling property in Israel. If you want a clear read on what your rights are worth and how to transfer them cleanly, tell us about your property and we will map your options.

Frequently asked questions

Can I sell my apartment after signing a TAMA 38 or Pinui Binui agreement?

A sale may be possible, but check the current property records and project agreement first. The buyer’s position under the agreement and any developer, lender or other consent depend on the documents and project stage.

Do I have to tell a buyer the project is delayed?

Yes. Give the buyer the real stage, the signature level, the permit status and any delay, in writing. Hiding a known problem puts the sale and your tax position at risk.

Is the sale price higher because of the new apartment?

The value may be higher or lower depending on the current property, project documents, stage, comparable transactions and risks. Obtain an independent valuation.

Do I pay betterment levy when I sell?

Possibly. Liability, the rate and any relief depend on the property’s rights, the relevant plan and applicable rules. TAMA 38 and Pinui Binui can have different provisions. Check the assessment with a licensed professional.

Who gets the temporary-housing payments if I sell during Pinui Binui?

Check the project agreement and sale documents. Ask the project’s lawyer who is entitled to each payment and whether consent is needed, then record the agreed terms in the sale contract.

Related pages

• Urban renewal in Israel
• TAMA 38 in Israel
• Pinui Binui
• How to sell an apartment in Israel
• Taxes when selling property in Israel

This is general information, not legal or tax advice; confirm with a licensed professional.