War-Damage Rebuilding Law: Declared Areas and Owner Options

Under Israel’s War-Damage Rehabilitation through Urban Renewal Law, 2026, the government has declared 8 rehabilitation areas (nine compounds, because Bat Yam has two) where missile-damaged buildings will be demolished and rebuilt as urban renewal. Every owner in a declared area chooses between a new apartment in the rebuilt project (a rehabilitation deal) and a cash exit agreement priced by the Chief Government Appraiser. An exit agreement signed within 95 working days of the declaration gets the higher “increased” price. As of 29 October 2026, every declared area is still inside its increased-price window: the gov.il area pages put the last day between 23 November 2026 (Arad, Dimona, Rehovot and Tel Aviv) and 28 January 2027 (Bat Yam). This page lists the areas, the deadlines and how the money works, from the government’s own pages, checked on 29 October 2026.

The law itself (חוק שיקום נזקי מלחמה בדרך של התחדשות עירונית, chok shikum nizkei milchama b’derech shel hitchadshut ironit) passed the Knesset in March 2026 and was published on 5 April 2026. Our news report on what the new war-damage rebuild law changes covers the background. If Pinui Binui and TAMA 38 are new to you, start with our urban renewal guide.

What a declaration means for owners

An area is declared by a numbered government decision under section 3(a) of the law, on the recommendation of a statutory advisory team. The declaration means the area will be rehabilitated through urban renewal: some or all of the existing buildings are demolished and new ones are built in their place. From then on:

• You choose between two deals. A rehabilitation deal (עסקת שיקום, iskat shikum) is in substance a Pinui Binui deal: you sell your rights to a developer in exchange for a new apartment in the new building. An exit agreement (הסכם יציאה, heskem yetzia) sells all your rights to a developer for cash, so you can buy elsewhere without waiting for the project. Both deals are with a developer, not with the state.
• One developer runs the project. It must be approved by the Director of the Government Authority for Urban Renewal as the “rehabilitation developer” (יזם שיקום, yazam shikum) after signing up a special majority of owners.
• Planning follows a fast clock. The plan is promoted either by the local authority or local planning committee, or by the Authority through the national committee for preferred housing areas (VATMAL), and it may not go below the minimum density set in the declaration. The guide sets submission within 3 months of the declaration, deposit within 6 months and approval within 12 months of submission, with limited extensions.
• Permits freeze briefly. No building permits, land-use permits or subdivision plans are issued in the area for 60 working days from the declaration, or until the planning body sets conditions under section 78 of the Planning and Building Law, whichever comes first.
• It can fall away. If no rehabilitation developer is approved within the period the law sets, the declaration is cancelled and the area can be renewed only under the ordinary urban renewal rules.

Not every hit compound is declared. For the Shimshon compound in Haifa, the advisory team issued a preliminary recommendation and then decided not to promote a declaration. On the Planning Administration’s list updated 8 September 2026, no further areas were under examination.

The nine declared compounds

The table below combines the four government decisions with the Authority’s area pages. “Existing to proposed homes” comes from the planning checks the Authority announced; these are proposals, not approved plans. The compensation policy is the local committee’s rule for how much extra floor area a replacement apartment gets, and it drives the increased exit price (explained further down).

The first four areas held about 310 apartments in 34 damaged buildings, to be replaced by about 1,000 new apartments, according to the Authority. A few details by area:

• Dimona and Arad were hit during Operation Roaring Lion; in each, five buildings were damaged. The Authority’s two releases give different hit dates, so we leave the date out.
• Rehovot was hit on 15 June 2025, during Operation Rising Lion, between Harlap, Teller and Bilu streets.
• Tel Aviv: on 28 February 2026, during Operation Roaring Lion, a missile fell very close to Yehuda HaLevi 121. Most nearby buildings had light blast damage, but this nine-apartment building was damaged more seriously and received a dangerous-building order. The plan is a new building with 14 apartments.
• Ramat Gan was hit on 13 June 2025 (Operation Rising Lion) on Tirza Street and Jerusalem Boulevard. Eleven buildings were damaged: 4 classed red, 6 orange and 1 green.
• Bnei Brak was hit on 23 March 2026 (Operation Roaring Lion). Two buildings were damaged, one red and one orange.
• Bat Yam‘s two compounds were damaged during Operation Rising Lion. Decision 4449 also told the transport, energy, environmental protection and interior ministries to examine war-damaged infrastructure and how to fund its repair, and asked the Planning Administration to consider amending the law to allow a land swap between municipal land outside a rehabilitation area and building land inside it. That is a proposal to consider, not an enacted change.

Each decision also sets a minimum gross density for the area, a planning floor rather than a unit count: 60,000 persons per sq km in Arad and Dimona, 65,000 in Rehovot, 55,000 in Tel Aviv, 75,000 in Ramat Gan, 85,000 in Bnei Brak, 45,000 in Haifa, and 96,000 and 83,000 in Bat Yam A and B.

Owner deadlines in each area

The clock runs in working days from the declaration. The government decision date and the date the area pages count from are not always the same: decision 4286 is dated 28 June 2026, but the pages for Arad, Dimona, Rehovot and Tel Aviv count from 30 June 2026; decision 4404 for Haifa is dated 19 July 2026, but its page counts from 13 August 2026. The dates below are the ones the area pages publish. Dates before 29 October 2026 have passed.

The area pages write “15 days”, “40 days” and “75 days”, but the Authority’s guide and the municipal notices say working days, and the calendar dates match working-day counts (Bat Yam, declared 6 September 2026, had owner information due by 7 October 2026).

The owner clock, step by step

New apartment or cash exit?

This is the decision every owner in a declared area faces. The comparison below is ours, built from the Authority’s guide, notices and FAQ.

An owner who, by day 95, signed a rehabilitation deal with a developer that was not approved (including an earlier Pinui Binui deal or a building-strengthening deal) can still sign an exit agreement with the approved developer at the increased price after day 95. A Pinui Binui deal signed before the damage counts as a rehabilitation deal. An exit agreement can cover an apartment or another unit used for business, but not a vacant plot.

How the exit price is built

• Basic price: the value, set by the Chief Government Appraiser, of a new apartment in the area that is similar to yours in its characteristics, including its current floor area, at values on the day before the war damage. Floor area is measured under section 3 of the Sale (Apartments) Law, 1973.
• Increased price: the basic price plus the value of one third of the extra area a replacement apartment would get under the local committee’s compensation policy (מדיניות תמורות, mediniyut tmurot). Where there is no policy, the extra area is 4 sq m of main-use area.
• Floor: the appraisal is never lower than the flat’s market value on the eve of the war damage.
• What can raise it: the flat’s position (floor, aspects, view, rear-facing), legally registered attachments shown in the permit or registration documents (storage room, garden, balcony, roof), approved building rights under a valid plan that belong to the flat and can be used now, and, only in exceptional proven cases, a unique upgrade that makes it worth more than a standard new apartment.
• What is ignored: ordinary renovations and finishes (flooring, an upgraded kitchen, air conditioning, carpentry, cladding), illegal additions or uses, unlawful takeover of common property, and building rights from renewal or expansion plans that are not yet approved and vested.

Here is what the “one third” rule gives in each area, using the policies on the area pages. The arithmetic is ours.

Worked example (illustrative only). Assume the appraiser values a similar new 70 sq m apartment in your area at ILS 30,000 per sq m before the damage. These are made-up numbers to show the mechanics, not a valuation. The basic price would be 70 x 30,000 = ILS 2,100,000. In an area with no policy, the increased price adds 4 sq m, worth about ILS 120,000 on the same per-metre assumption, for about ILS 2,220,000. In an area with a 12 sq m policy the extra area is also 4 sq m; with a 6 sq m policy it is 2 sq m (about ILS 60,000 here). The real figure for the extra area is whatever value the appraiser sets.

Objecting to the appraisal

You can object to the objections committee at the Ministry of Justice (the committee under section 9A(b) of the Land (Acquisition for Public Purposes) Ordinance, 1943) within 75 working days of the declaration, yourself or through a representative, online with the national ID login. The objection needs an appraisal signed by a licensed land appraiser, a receipt for the objection fee (set by the 2010 objection fee regulations and paid through the government payment service; the service page does not state the amount), and a power of attorney if a representative files it. The original appraiser may respond; a hearing is held within 45 days of the response or of a date the committee sets, whichever is earlier, though the committee may decide on the papers and may join objections from the same or nearby compounds. Its decision is due within 90 days of the hearing or of receiving extra evidence it asked for, whichever is later.

Clean title, mortgages and getting paid

• You sell free of everything. The price is for all your rights free of any debt, mortgage, lien or third-party right. To get the full amount you must clear them, for example by moving (porting) your mortgage to another property or repaying the loan, or agree with the developer how they will be cleared. You may use part of the price to clear them, such as paying a debt behind an attachment. A registered third party must give written consent to the deal.
• Your agreement follows the winning developer. You may sign an exit agreement with any developer. If a different developer is approved, the law requires your agreement to be assigned to it, and a developer is approved only if it commits to honour exit agreements signed with others. The approved developer must buy the rights of every owner who wants to sell.
• It can become void. An exit agreement is void if no rehabilitation developer is approved within the statutory period, or if the Authority cancels the approval of a developer that did not pay on time. The area can then be rebuilt only under the ordinary law.
• Payment timing can move. At your request, payment can be deferred, but not past the evacuation date needed to start building. The Property Tax (Mas Rechush) Director may extend the period for delays outside both sides’ control, such as waiting for a lender to release a lien. If the developer does not pay, the Authority may cancel its approval, which may lead to the declaration being cancelled.
• A recommended contract exists. The Authority published a recommended exit agreement on 9 July 2026 (updated 27 August 2026), drafted to give certainty and allow smooth assignment to the approved developer. It is recommended, not mandatory.

Ask how the developer will pay you

Because exit payments come early in a project, the state may lend the rehabilitation developer the money from the Property Tax compensation fund. The developer must apply to the Mas Rechush Director right after signing the first exit agreement in the area (that is, from day 51), have the Director’s confirmation that it qualifies when it applies for approval, and provide the securities required before the money is paid. The rules look at experience, financial strength, corporate governance and regulatory compliance, and whether the developer was convicted or indicted for a disqualifying offence. The developer repays on completion and no later than 6 years from the declaration, with indexation only, but interest is added at rising rates if it is late applying for a permit or starting work; the Authority’s FAQ cites 6% a year at the later stage.

The official notices advise owners to ask the developer they plan to sign with whether it will seek this aid, whether it has applied 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 on the statutory timetable.

For Dimona and Arad, where the Authority found the projects need help to be economically viable, the Authority and the Finance Ministry agreed extra grants of ILS 100,000,000 in total, on top of Property Tax money allocated to the compounds. The Authority Director published notices on 27 August 2026 with the grant for each compound and its conditions, together with a document on VAT on additional apartments.

How the rehabilitation developer is chosen

A developer is approved only with a special majority, which differs from the Pinui Binui majority:

• agreements with owners holding a majority (over 50%) of the properties in a majority of the buildings in the area, including a majority in every “green” (undamaged) building; or
• agreements with owners of at least 80% of all the properties in the area.

A vacant plot counts as one apartment, and either a rehabilitation deal or an exit agreement with any developer counts as consent. The Authority Director then approves one of three: a developer with its own special majority that includes rehabilitation deals with owners of at least 20% of the properties; the developer with the most rehabilitation deals, if together with all exit agreements signed with any developer the area reaches the special majority; or the developer with the most rehabilitation deals where a special majority signed with someone, which gets a 30-day provisional approval and keeps it only if it reaches a special majority in that time. Exit agreements signed in those 30 days are basic, not increased. Developers applying jointly must follow the Authority’s partnership procedure, published 22 July 2026.

Some Pinui Binui Law rules apply to rehabilitation deals (an owners’ meeting and a key-terms document before signing, delivery of the documents afterwards, majority cancellation of a pre-declaration deal if the developer misses statutory dates, notice of the first signing in a building). Others do not, including the form-and-content rules, the right to complain to the commissioner about abusive signing, and the majority rule for one owner of many units.

If an owner refuses, only the approved developer can sue, with the special majority, and as soon as the rehabilitation plan has been submitted. The case runs as an expedited procedure. The court may order the owner to sign a rehabilitation deal or an exit agreement and cancel a deal with another developer. It weighs the area’s size and damage, the developer’s conduct, the deal’s viability, alternative housing, securities, housing options for older owners and adapted solutions for people with disabilities, and it may grant relief even where the refusal looks justified.

Reporting your agreement: the documents

If you report your own deal on the Authority’s site, it is one free online form per agreement, after a one-time registration with the national ID system. Attach:

• an Israeli ID card with its appendix, or a passport, for each owner;
• a copy of the signed agreement, and optionally its tax report;
• proof of ownership: an up-to-date Tabu extract (נסח טאבו) on the reporting day; or an Israel Land Authority rights confirmation; or a housing-company confirmation plus the ILA notice; for undivided (musha) ownership, a Tabu extract plus a plan and permit or a co-ownership agreement; for a purchase not yet registered, the sale contract, the seller’s or seller’s lawyer’s confirmation that the deal was completed, the tax confirmation and, if you hold the flat, an arnona voucher.

A warning note (הערת אזהרה, he’arat azhara) alone is not enough proof of a buyer’s rights. Extra documents apply for a minor owner (the parent’s ID and the Administrator General’s or court’s approval), a guardian, an absent or deceased owner with unknown heirs (a court management order), an activated enduring power of attorney, a deceased owner with known heirs (a succession or probate order), and a registered note that needs a third party’s consent, including warning notes under sections 126, 128 and 130 of the Land Law. The Authority may ask for more. The notices also advise checking that the flat is registered in your name at the Land Registry, for example after a purchase or inheritance, and organising with owners in all the buildings, with an elected representation and your own lawyer, to choose a developer together.

Older owners, businesses and tenants

• Older owners: the law gives older owners extra housing options, but only if they lived in the flat when the war damage happened (section 48(9)). An older owner who held the flat as an investment chooses a rehabilitation deal or exit agreement like anyone else. Check the age and residence conditions with the Authority or a lawyer before relying on them.
• Business units: owners of business units are treated like apartment owners.
• Tenants: tenants, whether of a flat or a business unit, have no rights under this law. For a renter’s position after damage, see our guide to tenant rights when a rental is damaged by war.

Tax if you take the cash

According to the Authority’s FAQ, an owner who sells under an exit agreement is exempt from land appreciation tax (mas shevach) under section 51 of the law if they buy a replacement home for at least 75% of the amount received within 12 months. One FAQ answer counts the months from the day the developer acquired your rights, another from the day you were paid; ownership passes on full payment, but confirm the start date with your tax adviser. Meeting the condition also exempts the replacement home from purchase tax (mas rechisha). Buy for less, or not at all, and the sale is taxed like any home sale unless you have a personal exemption, and purchase tax applies to the next home.

You do not have to use the money to buy a home and there is no deadline to spend it. Once you buy a replacement for at least the required share, the rest is yours to use. For the general rules, see our guide to mas shevach when selling property in Israel.

How areas are chosen

The government may declare a war-damaged compound within 60 working days of the damage, on the advisory team’s recommendation; the team chair can extend that by up to 10 working days, and extensions were used for Bat Yam and Haifa. The team is chaired by the Director of the Planning Administration and includes a Deputy Attorney General, the Director of the Government Authority for Urban Renewal, the Finance Ministry’s Budgets Commissioner, the Mas Rechush Director, the Chief Government Appraiser and the head of the local authority, with an academic observer.

• Minimum condition: at least one “red” building (destroyed, or to be demolished because of the damage, per the local authority engineer), or at least 3 “orange” buildings with at least 12 homes where the Mas Rechush Director confirmed significant harm to their stability and safety. Meeting it does not oblige a declaration; the team weighs economic feasibility and existing plans.
• What can be included: red and orange buildings; “green” undamaged buildings the district planner considers clearly necessary, at most 25% of the buildings; vacant plots, with green-building and vacant plots together at most 40% of the area; and adjoining public plots.
• The opinions: the local authority engineer (building classes), the district planner, Mas Rechush engineers on stability and on maximum repair cost, and an economic appraisal under Appraisal Standard 21. All but the appraisal are published on the Planning Administration site at least 21 working days before the recommendation goes to the government.
• Public comments: at least 21 days before recommending an area, the team publishes a notice of intent on its website, the local authority’s website and a sign on site. Anyone who considers themselves harmed may comment in writing within 14 days (the notices for specific areas gave 14 working days from the later website publication), with full contact details, their connection to the area and reasons.

Owners who repair instead of rebuilding have a separate easing: since a 1 June 2026 amendment to regulation 60(d) of the building licensing regulations, renewing a permit to restore a damaged building requires the damaged structural parts to meet the current design code, while the building as a whole need only be no less stable than before the damage and pose no real danger, as the structural designer declares.

Buying in or next to a declared area

A flat inside a declared boundary is now a flat with a statutory clock attached. Before you sign, check:

• whether the address is inside the declared boundary (the decision lists blocks, parcels and street numbers) and which compound it is in;
• whether the seller signed a rehabilitation deal or an exit agreement, with whom, and whether it was reported, because an exit agreement is assigned to whichever developer is approved;
• the appraisal the seller received and whether an objection is pending;
• the developer status on the Authority’s page and, if one is approved, how it is financing exit payments;
• the mortgage and any liens, since the exit price is paid only for clean rights;
• the permit freeze and the planning stage, which decide what can be built and when.

For buildings outside this law, our guide to how renewal compounds are declared and funded explains the ordinary Pinui Binui statuses.

Who to contact

Sources

1. Government Authority for Urban Renewal, guide to the War-Damage Rehabilitation through Urban Renewal Law, 2026 (published 11 October 2026, updated 22 October 2026).
2. Government Authority for Urban Renewal, questions and answers on the law (updated 12 July 2026).
3. Planning Administration, declared areas and areas under examination (both updated 8 September 2026); about the law (updated 2 September 2026).
4. Government decisions 4286 (28 June 2026), 4325 (5 July 2026), 4404 (19 July 2026) and 4449 (6 September 2026).
5. Government Authority for Urban Renewal area pages: Arad, Dimona, Rehovot, Tel Aviv, Ramat Gan, Bnei Brak, Haifa, Bat Yam A and Bat Yam B, with the municipal declaration notices attached to them.
6. Ministry of Justice service pages: sending data for the exit appraisal and objecting to the exit appraisal.
7. Government Authority for Urban Renewal service pages: reporting a rehabilitation deal or exit agreement and applying for approval as rehabilitation developer.
8. Government Authority for Urban Renewal: recommended exit agreement (9 July 2026, updated 27 August 2026), developer partnership procedure (22 July 2026), timeline document (9 June 2026) and Dimona and Arad funding notices (27 August 2026).
9. Government Authority for Urban Renewal releases of the first four areas, Ramat Gan and Bnei Brak (27 July 2026) and Dimona and Arad funding (31 August 2026).
10. Israel Tax Authority, guidelines on state aid to rehabilitation developers under section 45 (7 May 2026).
11. Planning Administration, Haifa Shimshon compound, Haifa Palyam compound, amendment to regulation 60(d) (30 June 2026) and contact page.

Own a flat in one of these compounds, or thinking of buying near one? Tell us the address and your situation and we’ll help you compare the exit price with what a replacement home costs in the same city, before you sign anything.