Buying a new-construction apartment in Israel starts with checking the seller, the land rights and the building permit. Your own lawyer then reviews the contract, technical specification, payment security, delivery terms and registration obligations. Keep those checks connected: an attractive payment plan does not establish that the seller can sell the apartment, and a payment guarantee does not promise an on-time handover. The contract date also matters because different versions of the indexation, delay and defect rules can apply. [1] [2] [3]
For the big decision, see new versus second-hand property in Israel; for the general flow, see the Buy Property in Israel hub. The detailed payment-security tables and transfer checks are in our existing off-plan buyer protections and payment guide.
New-build buying at a glance
| Stage | What to establish | Record to keep |
|---|---|---|
| Choose the project | Seller’s authority, executing contractor, land rights and permit status | Registry and permit documents checked for the specific apartment |
| Before signing | Full price, payment schedule, specification, plans and delivery date | Signed contract and complete annexes |
| Before paying | Lawful security, verified payment instructions and documents due | Voucher where required, receipt and security record |
| During construction | Progress, agreed changes, funding and any delivery-date dispute | Dated progress reports and signed change orders |
| At handover | Applicable approvals, utility connections, condition and possession | Approvals, inspection report, handover record and outstanding-defect list |
| After handover | Repair follow-up and registration of the buyer’s rights | Written notices, repair records and current rights evidence |
Three numbers to keep in context: 7% is the collection threshold before statutory security is required; 20% is the initial unlinked share under the post-7 July 2022 indexation rules; 14 business days is the statutory guarantee/insurance issuance window after a qualifying voucher payment, with the alternative-security provision. These are three different rules, not interchangeable payment instructions. [2] [4]
Terms you will see: kablan is commonly used for a contractor or developer, so identify the actual legal entity and its role. Arvut is a guarantee. Mifrat is the contractual technical specification. A local-authority occupancy approval and a teudat gmar completion certificate must be identified by their actual document and scope; do not treat the names as interchangeable. [1] [7]
If the developer offers financing for the milestone payments, read understanding contractor loans in Israel before signing.
Step 1: Check the developer and their track record
Start with the legal entities behind the project. Record the seller’s exact name and registration number, the landowner or rights holder, and the contractor carrying out the building work. They may have different roles. Ask your lawyer to establish the seller’s right to sell the specific apartment, including any agreement with landowners or existing apartment owners; the brand on the sales brochure is not that evidence. [1]
- Executing contractor: check the current registration and the work branch and financial classification relevant to the project.
- Past projects: visit completed buildings and speak to occupants about delivery and defect handling.
- Project finance: establish whether the project is financially accompanied and identify the actual accompanying institution.
- Land and apartment: match block and parcel details, inspect encumbrances and verify that the apartment is available for this seller to sell.
These checks follow the Housing Ministry’s buyer guidance. A financing arrangement is one part of the assessment; it does not replace checks on rights, permits, construction or the security offered to you. For the deeper pre-signing routine, see how to check building permits before buying in Israel. [1] [2]
Step 2: Confirm the building permit and project stage
Ask to see the actual building permit and have it checked against the local authority’s records, the block and parcel, the building and your apartment. If a permit has not yet been issued, have your lawyer explain the contract’s conditions, deadlines, exit provisions and treatment of money already paid. A pending permit does not remove the separate statutory payment-security requirements. [1] [2]
Project stage
Use the stage of construction to decide what evidence you still need, rather than assuming that an earlier purchase is always cheaper.
- Before construction: examine the permit position, plans, conditions and funding timetable.
- During construction: compare documented progress with the contract and any applicable statutory payment caps.
- Near completion: check the actual apartment, remaining work, applicable approvals and proposed handover arrangements.
Put the proposed moving date, temporary housing and financing dates alongside the project’s contractual timetable. That is a planning exercise, not a forecast that a particular project will finish on time.
Step 3: Hire your own lawyer (not the developer’s)
Retain an independent Israeli real-estate lawyer before signing or paying. The Housing Ministry recommends independent review of the apartment documents and negotiation with the seller. The seller’s registration lawyer may perform registration work for the buyer, but that service does not provide independent representation in negotiating the purchase. [1] [3]
The seller’s legal-fee contribution: the 2026 calculation
Where regulation 2 of the legal-expenses regulations applies, the maximum contribution is the lower of 0.5% of the apartment consideration stated in the sale contract and ILS 5,915, before adding VAT to the legal fee. The fixed amount took effect on 1 January 2026. Regulation 2 does not apply when the apartment consideration exceeds ILS 4,642,750; a price exactly at that threshold is not excluded by this condition. That exception removes this particular cap, not every rule governing a charge. [5]
| Apartment consideration in the contract | 0.5% calculation | Applicable ceiling |
|---|---|---|
| ILS 1,000,000 | ILS 5,000 | ILS 5,000 |
| ILS 3,000,000 | ILS 15,000 | ILS 5,915 |
| Above ILS 4,642,750 | Classify the charge and applicable rule | This regulation-2 cap does not apply |
These are calculations under the stated assumptions, not quotations for your own lawyer. The statutory registration-related legal expenses are paid directly to the lawyer, who must issue the buyer an invoice. Have your lawyer distinguish this charge from the separate price-control route in section 6C(b)(2), other registration charges and any historic contract regime. [3] [5]
A 2019 ministry position treats specified surveying, condominium-plan preparation and government registration charges as outside this particular legal-services limit. It also treats the described amounts payable to the seller under the sale arrangements as relevant to statutory payment protection. Ask for the service, supplier, amount and security treatment in writing; a new label on a fee does not establish its classification. [6]
For choosing independent counsel, see signing a property contract in Israel and the Israeli real-estate-law paperwork guide.
Step 4: Negotiate and sign the developer contract
Have your lawyer review a reservation document or memorandum before you sign it: the Housing Ministry warns that a preliminary memorandum can create binding obligations. Read the complete contract and specification away from the sales office, and put agreed promises and changes into the signed documents. [1]
- Full price: list the apartment price, parking, storage, registration-related charges, taxes, indexation and any separately priced work.
- Payment schedule: identify the security route, applicable stage caps and evidence required for each payment.
- Delivery: specify the contractual date, the applicable delay-compensation rule and any claimed extension.
- Specification and plans: obtain the completed, signed specification and the relevant apartment, floor, roof and plot plans.
- Changes and credits: record the item, price or credit, deadline and any agreed delivery impact.
The Sale (Apartments) Law requires the seller-signed specification and maintenance/use instructions with the contract; where the details needed for those instructions are not yet available, the signed instructions must be delivered when the apartment is made available. Changes to the specification require both parties’ signatures. [3]
Separate late-payment interest from indexation. Section 5B limits contractually agreed arrears interest by the ministerial rate and contains a seven-day qualification on when the obligation applies. Ask your lawyer to check the operative regulation, rate, contractual clause and calculation. No current numerical arrears-interest rate is assumed in the examples on this page. [3]
Step 5: How the bank guarantee (arvut bankait) protects your money
A seller covered by the investment-security law may not collect more than 7% of the apartment price without one of the five statutory forms of security. This is an aggregate collection threshold, not a permanent deduction from the payments that must be accounted for. The routes include a qualifying guarantee, approved insurance, a first mortgage, a qualifying warning note and a qualifying transfer of rights. Each has legal conditions. [2]
Under a guarantee or insurance route, check the issuer, the covered payments and the grounds for enforcement. A delay, breach or cancellation alone does not automatically produce a refund. A lawyer’s trust account is not itself a replacement for one of the statutory securities. [2]
In a financially accompanied project, verify the designated voucher and payment details with the accompanying institution. The statutory mechanism provides for the guarantee or insurance within 14 business days after the voucher payment, or assurance that another statutory security has been provided. Therefore, the document for that voucher payment need not always exist before the transfer. Have your lawyer confirm the lawful route before paying and follow up on every document when due. The payment guide’s voucher workflow explains the separate steps. [2]
Step 6: Make staged payments and arrange bank financing
The contract sets the payment schedule. Statutory construction-stage caps apply where payments are secured by routes other than the guarantee or insurance routes in sections 2(1) and 2(2). They are not a universal schedule for every new-build contract. The applicable project type and transition provisions also matter. See the two conditional stage tables in the payment guide. [2] [8]
If you borrow, obtain the lender’s written approval, release conditions and timetable for each amount you expect it to fund. Compare those dates with your contractual payment obligations. Keep your own available cash, approved mortgage funds, currency conversion and transfer time separate in the budget; do not assume the project financier and your mortgage lender are the same institution. [1]
Use the mortgage in Israel guide for the financing discussion, then confirm the loan amount and terms for your borrower classification with the lender. A rate or financing percentage quoted for another buyer is not your approval.
Step 7: Index-linked balances (the bill that quietly grows)
For contracts subject to Amendment 9, effective 7 July 2022, the first 20% of the contractual price paid at signing or before any other payment is unlinked. The parties may agree to link up to 50% of each remaining payment to the relevant Construction Inputs Index. This produces a maximum linked principal of 40% of the total contract price, derived from half of the remaining 80%; it does not permit linking the entire unpaid balance. Earlier contracts require the earlier applicable rules. [4]
The linkage end date is no later than the contractual delivery date, except for the delay cases specified in section 5A(c). Have your lawyer check the exact index, base date, permitted fraction, payment dates and end date. The initial 20% rule concerns indexation; it does not authorize collecting 20% without the required payment security. [4] [2]
A worked index scenario
Assume a contract price of ILS 3,000,000, the first ILS 600,000 already paid, a clause using the full permitted linkage, and all remaining linked principal still unpaid for one illustrative index movement. The maximum linked principal is ILS 1,200,000. A 3% movement then adds ILS 36,000: 1,200,000 × 0.03. This is an arithmetic scenario, not an index forecast or a quotation for a particular contract.
| Assumed index increase | Illustrative addition |
|---|---|
| 1% | ILS 12,000 |
| 2% | ILS 24,000 |
| 3% | ILS 36,000 |
Actual instalments may have different bases and payment dates. This example includes no separate VAT-rate adjustment, fees or financing costs. Before accelerating a payment to reduce linkage, compare the potential saving with financing costs, loss of liquidity and the security arrangements.
Step 8: Review the technical specification (mifrat techni) and upgrade costs
Use the specification and plans to establish what you are buying: room layout and finishes, doors and windows, outlets, sanitary fittings, parking and storage, and the shared facilities or areas attached to particular apartments. The seller must complete the prescribed specification in detail, and an amendment requires both parties’ signatures. Use an engineer or architect for the technical review where needed. [3] [1]
Ask for each upgrade through the seller and record its price, installation responsibility, credit for the standard item, execution deadline and any claimed delay to delivery. For the items covered by the statutory priced-item provisions, the specification supplies the applicable price or credit and must be updated after the qualifying change. [3] [1]
| Question | What to obtain |
|---|---|
| What changes? | Exact item, location, specification and revised plan |
| What does it cost? | Written price, tax treatment, installation charge and standard-item credit |
| Who is responsible? | Seller’s written responsibility and the party carrying out the work |
| Does it change delivery? | Any proposed extension and your lawyer’s assessment of its effect |
Build the upgrade budget from those quotations. A percentage of the apartment price cannot establish what a kitchen, flooring or electrical package will cost in your project.
Step 9: Delivery timeline and delay protections
Check the contract date before applying a delay formula. For contracts subject to the amendment effective 7 July 2022, section 5A provides compensation without proof of damage after the first month of delay, using the statutory comparable-rent tiers of 100%, 125% and 150%. The comparison is to an apartment of similar size and location, and the higher contractual delay-compensation amount applies where relevant. The statute addresses each month or part of a month and monthly payment. Earlier contracts retain the former applicable regime, including its different threshold and calculation. [4] [3]
| Period after the contractual delivery date | Comparable monthly rent multiplier |
|---|---|
| After the first month, through the end of month four | 100% |
| Months five through ten | 125% |
| Month eleven onward | 150% |
Keep the contractual date, notices, change orders and evidence of when the apartment was made available. The post-amendment exclusions include delay caused solely by the buyer and circumstances satisfying the requirements of section 18(a) of the Contracts (Remedies for Breach of Contract) Law. Have your lawyer assess the actual facts and proposed extension; a label in the contract does not establish that an exception applies. [3]
Our companion piece explains the separate off-plan payment protections and financial records. Keep those records alongside your delivery and temporary-housing budget.
Step 10: Final inspection and the Tofes 4 occupancy certificate
Arrange a documented inspection and record defects, unfinished work, meters, documents and keys in the handover record. Ask your lawyer and inspector which issues affect lawful delivery, which require repair, and what the contract permits concerning the final payment. Do not assume that every minor defect must be repaired before any handover or that signing a factual record removes statutory rights. See property inspection (bedek bayit) in Israel. [1] [3]
Identify the actual local-authority approval covering your apartment. The 2021 regulations used for completion and possession evidence under the investment-security framework require the stated completion/occupancy documentation and seller-connected water and electricity, with the prescribed confirmations. Those connections may be permanent or temporary under that instrument. The regulations have their own project transition, and they are not the only test for every occupancy, contractual-delivery or delay dispute. [7]
Before agreeing to release or replace a guarantee, have your lawyer check both the completed delivery conditions and the separate legal conditions for replacing payment security. Receiving keys is not, by itself, proof that every registration or security step has been completed. [2] [7]
Step 11: Defect liability (bedek) and warranty (achrayut)
The ordinary bedek period starts when the apartment is made available. Its length depends on the defect category. During that period, the seller has the statutory defence of proving buyer or subbuyer causation. The following three-year achrayut period has a different burden: the buyer or subbuyer must show that the nonconformity originated in design, work or materials. These rules must be matched to the applicable version of the law; the 2011 amendment excludes apartments whose construction ended or sale contract was signed before its commencement. [3] [9]
| Category | Bedek period |
|---|---|
| Joinery and metalwork, including aluminium and plastics | 2 years |
| Flooring and internal cladding, including settlement and wear | 2 years |
| Failure of machinery or boilers in function or durability | 3 years |
| Courtyard development, including the surfaces, structures and systems defined in the schedule | 3 years |
| Failure of thermal-insulation components in function or durability | 3 years |
| Pipe-system failure, including water, heating, gutters, wastewater and sewage; including leaks | 4 years |
| Building waterproofing, including underground spaces, walls, ceilings and roofs | 4 years |
| Cracks wider than 1.5 mm in non-load-bearing components | 5 years |
| Exterior cladding detachment, peeling or disintegration | 7 years |
| Other nonfundamental nonconformity | 1 year |
Internal cladding and exterior cladding are different categories. The additional three-year warranty is separate from the table, and these periods are not a complete statement of court-filing deadlines. Fundamental nonconformity affecting load-bearing or load-transmitting parts and building stability or safety has separate statutory treatment, including a 20-year inspection period and different proof rules afterwards. [3]
Notify the seller promptly in writing. Section 4A contains a one-year notification rule for nonconformity discoverable when the apartment was made available, and a reasonable-time-after-discovery rule for defects not discoverable by reasonable examination. Give the seller the proper opportunity to repair a repairable defect. Section 4B separately addresses recurring defects and urgent defects not repaired within a reasonable time after notice; it is not a blanket instruction to wait two years. [3]
VAT on a new-build apartment
Before comparing offers, obtain a written schedule showing the apartment price, whether each amount includes VAT, and the treatment of separately quoted legal services and upgrades. Ask the seller to identify the net amount, VAT and total on each relevant calculation, and have your lawyer or tax adviser confirm the applicable tax point and any contractual allocation of a tax-rate change. Keep this review separate from the indexation calculation. The Housing Ministry’s price checklist recommends identifying the full price and its associated charges before signing. [1]
A net-versus-gross example
Assume, purely for arithmetic, that ILS 118,000 includes VAT at 18%. The net amount is ILS 100,000 and the VAT is ILS 18,000. If a hypothetical 19% rate applied to the same net amount, the total would be ILS 119,000: an increase of ILS 1,000. Applying a one-percentage-point increase directly to ILS 118,000 would give the wrong result because that starting figure already includes tax.
| Component | Assumed 18% | Hypothetical 19% |
|---|---|---|
| Net amount | ILS 100,000 | ILS 100,000 |
| VAT | ILS 18,000 | ILS 19,000 |
| Total | ILS 118,000 | ILS 119,000 |
This example does not state the current tax rate, predict a change, determine the tax point for a staged payment, or establish a seller’s right to collect an extra amount. Use the contract, invoices and professional tax assessment for those questions. Do not add tax a second time to a figure already stated as tax-inclusive.
Buyer cash planning
Keep separate lines for the contracted price, legally permitted indexation, any properly calculated tax adjustment, agreed upgrades, legal and registration costs, finance and temporary housing. This makes each assumption visible instead of combining different bases into one percentage estimate.
For the alternative purchase route, see buying a second-hand apartment in Israel and the new versus second-hand comparison. Buyer classification has its own rules: see buying after aliyah and buying real estate in Israel as a foreigner, then confirm your own tax and financing position.
Registration in the Tabu
Distinguish subdivision or consolidation of the land, registration of the building as a condominium, and registration of your individual rights. Under the applicable section 6B scheme, the seller must carry out its subdivision/consolidation obligations as early as possible. For a building registrable as a condominium, the next deadlines use the later of two events. [3]
| Step | Period | Starting event |
|---|---|---|
| Condominium registration | Within 1 year | Later of subdivision/consolidation registration and the apartment being made available |
| Registration of the buyer’s rights | Within 6 months | Later of condominium registration and the apartment being made available |
A separate route applies where the building cannot be registered as a condominium: the six-month period for the buyer’s rights uses the later of subdivision/consolidation registration and the apartment being made available. Periods the seller proves were delayed by circumstances outside its control that it could not prevent are excluded under section 6B(c). Check the applicable contract/construction cohort rather than converting these rules into a fixed period after move-in. [3] [9]
Do not assume a warning note exists automatically while registration is pending. Have your lawyer identify the protection actually in place and obtain the relevant rights evidence. Follow the process in registering property in Israel and distinguish the documents with a Tabu extract or certificate of rights. [2]
Before you sign or pay: a quick checklist
- Has your independent lawyer checked the seller’s authority, land rights, permit position and complete draft?
- Can you identify the security route and verify the actual institution or registered right?
- For a voucher payment, are the voucher details verified, the payment instructions agreed and the documents already due accounted for?
- Is the next security-document deadline recorded, including the statutory issuance window where it applies?
- Are the payment schedule, indexation, tax treatment, upgrades and delivery provisions documented?
If the payment route or a material document is unexplained, resolve it with your lawyer and the relevant institution before transferring money. This checklist combines the statutory security rules with the Housing Ministry’s pre-signing checks. [1] [2]
New-construction contract checklist
- Seller, rights holder and executing contractor identified; relevant registrations and documents checked.
- Permit and plans matched to the apartment; any outstanding condition explained.
- Independent lawyer engaged before a binding document or payment commitment.
- Statutory security, payment route, receipts and issuance deadlines recorded.
- Contractual schedule checked against the security route and any applicable stage caps.
- Index clause checked by contract date, linked share, index, base and end date.
- Specification, plans, changes, credits and costs recorded in the signed documents.
- Delivery date, compensation regime and any proposed extension checked.
- Handover approvals, utility evidence, inspection and outstanding defects documented.
- Correct defect categories, proof rules, notice and repair process understood.
- Registration stages, relevant starting events and interim protection identified.
FAQ
Is buying an apartment on paper safe in Israel?
Statutory security is an important protection, but it does not remove construction, delivery, finance or legal risk. A covered seller cannot collect more than 7% of the price without a qualifying security. Have your lawyer verify the particular arrangement and enforcement conditions; compliance is not a promise of automatic recovery after every problem. [2]
What is the bank guarantee (arvut bankait)?
It is a statutory payment-security instrument with defined coverage and enforcement grounds. Delay or cancellation alone does not automatically trigger payment. Under the voucher mechanism, the guarantee or insurance may follow payment within the 14 business days statutory window, subject to the alternative-security provision. Verify the route before paying and check the document when due. [2]
When do I get the keys?
Check the contract, the local-authority authorization covering the apartment, utility and completion evidence, inspection and possession arrangements with your lawyer. A certificate’s name alone is not the complete handover test, and not every minor defect has the same effect on delivery. Releasing or replacing payment security is a separate legal decision. [7] [3] [2]
Do I pay VAT on a new-build?
Have the seller state clearly which amounts include VAT and show the net amount, tax and total. Ask your lawyer or tax adviser to confirm the transaction’s treatment, relevant tax point and any rate-change clause. Do not add VAT again to a tax-inclusive figure or assume that the date of every transfer alone answers the tax question.
New-build or resale?
Compare the actual apartment, completion and possession timetable, condition, contract, price-adjustment clauses and tax treatment. A new-build purchase needs the developer and payment-security checks explained here; a resale needs its own rights and condition checks. See the full new versus second-hand comparison.
How long until the apartment is registered in my name?
The applicable registration periods depend on the stage already completed and the later-of starting events in section 6B, with statutory exclusions and cohort conditions. They are not simply one fixed number of years after move-in. Ask which step is outstanding, what protection exists now and which document will prove registration of your rights. [3]
Sources
- Ministry of Construction and Housing: New Apartment Buyer Guide, especially chapters 3–7. Practical document and project checks; dated statutory passages must be read with later amendments.
- Sale (Apartments) (Assurance of Investments of Purchasers) Law, Bank of Israel collection, sections 2, 2A, 2A1, 3 and 3B; read with the 2026 Economic Plan Law, section 31 and the commencement provision in section 37.
- Sale (Apartments) Law, official June 2025 law collection, pages 364–374: specification, defects, delay, indexation, registration, legal expenses and applicability.
- Sale (Apartments) Law, Amendment 9 (2022), sections 1–5: indexation, delivery delay and the contract-date transition. Published 30 June 2022; commencement seven days later.
- 2014 legal-expenses regulations, regulations 2–4, Gazette 7461, page 454; and 2026 annual notice, Gazette 12242, page 987. These links reproduce the published Gazette instruments.
- Housing Ministry position of 2 December 2019 on surveying, condominium-plan and government registration charges.
- 2021 completion and possession evidence regulations, Gazette 9242, page 2410. Their purpose and project transition must be checked when considering replacement of payment security.
- 2019 payment-stage amendment, Gazette 8208, pages 3154–3156, including its project-wide transition.
- Sale (Apartments) Law, Amendment 5 (2011), including defect categories and the contract/construction transition.
Vet the kablan and guarantee before signing
Start with your budget, preferred location, apartment requirements and moving timetable. Tell the Semerenko Group team what you are looking for so we can help you compare project options. Have your independent lawyer and relevant technical professionals confirm the contract, rights, security and delivery conditions before you commit.
This is general information, not legal or tax advice; confirm with a licensed professional.
