Urban renewal legislation

Pinui-Binui (Encouragement of Pinui-Binui Projects) Law, 5766-2006 (חוק פינוי ובינוי (עידוד מיזמי פינוי ובינוי), התשס״ו-2006). Until 2018: "Pinui-Binui (Compensation) Law" (חוק פינוי ובינוי (פיצויים)). Extensively amended in 2021 and in 2023.

Section 1

Definitions, including "pinui-binui transaction" and "qualified majority": two thirds of the apartments in the compound, three fifths in each building, and more than half of the common property in each building.

Section 1A

The developer's duty to convene the apartment owners and to deliver a document of the main points of the offer at least two weeks before signing.

Section 1C

Cancellation of a transaction signed before the meeting, by majority decision, as long as 40% have not signed.

Section 1D

Cancellation of transactions when the project is stuck: signatures were not obtained or a plan was not submitted within the deadlines in the Law.

Section 1E

Power to set provisions in regulations on the form and content of the transaction.

Section 2

A claim against an apartment owner who refuses unreasonably, and when a refusal is not unreasonable, including the protections for apartment owners aged 70 and 75 and over and for people with disabilities.

Sections 2A-2B

A pinui-binui appraiser appointed by the director of the Government Authority, to examine the economic feasibility.

Section 4

How an owner of several apartments is counted: up to 30%, plus one third of the excess.

Section 5B

Cancellation of a transaction because of abusive signing practices, by the Tenants' Ombudsman.

Section 6

Duty of disclosure for anyone acting on behalf of the developer or receiving consideration from it.

Section 6A

Any contracting out of the provisions of the Law to the detriment of the apartment owner is void.

About the Law on Kol Zchut | The pinui-binui guide

Land (Strengthening of Condominium Buildings against Earthquakes) Law, 5768-2008 (חוק המקרקעין (חיזוק בתים משותפים מפני רעידות אדמה), התשס״ח-2008). Amended in 2023 by the Economic Plan (Legislative Amendments for Implementing the Economic Policy for the 2023 and 2024 Budget Years) Law, 5783-2023 (חוק התכנית הכלכלית (תיקוני חקיקה ליישום המדיניות הכלכלית לשנות התקציב 2023 ו-2024), התשפ״ג-2023).

Section 3

Changes to the common property for strengthening, by a majority of the apartment owners.

Section 4

Extending apartments, with 60% of the apartment owners.

Section 5

Strengthening and building new apartments: the Superintendent of Land Registration may approve on a claim by two thirds of the apartment owners.

Section 5A

Demolition and rebuilding: two thirds under the 2023 amendment, in a building of at least four apartments. Before that, four fifths.

Section 5B

Convening the apartment owners and a document of the main points of the offer before signing, as in pinui-binui.

Section 6A

Appointment of an appraiser from the list under the Pinui-Binui Law, when the Superintendent needs an appraisal opinion.

Section 7

Consent in writing, certified by a lawyer.

Protections

Alternative housing for older apartment owners, for housebound people and for people with disabilities. The protection age was lowered in 2023 from 80 to 75.

The TAMA 38 guide | The building renewal guide

Planning and Building Law, 5725-1965 (חוק התכנון והבנייה, התשכ״ה-1965). Amendment 139 (2022), the "Shaked plan".

Section 70A

A plan for the resilience of buildings against earthquakes, approved by the local planning committee: up to a 400% addition in demolition and rebuilding, up to 200% in strengthening, and up to 550% in areas set by order. The track has no expiry date.

The Third Schedule

Betterment levy. In building renewal, a quarter of the betterment, with the possibility of a reduction to one eighth. In pinui-binui the base rate is a quarter of the betterment, and the local authority may set for each area half, a quarter or an exemption, for a period of five years. Under the Law the levy is imposed on the apartment owner, and it is the agreement that transfers it to the developer.

TAMA 38

The National Outline Plan for strengthening buildings. Its formal end date was 1 October 2023, but it was extended. In some cities, including Tel Aviv-Yafo, Bnei Brak and Bat Yam, it ended on 29 August 2024, and in cities that submitted a replacement plan, on 18 May 2026 at the latest.

Government Authority for Urban Renewal Law, 5776-2016 (חוק הרשות הממשלתית להתחדשות עירונית, התשע״ו-2016).

Section 7

The Tenants' Ombudsman: examines complaints about the conduct of developers, organisers and administrations, and decides within 90 days. A finding that a complaint is justified is prima facie evidence in legal proceedings.

Section 14

Declaration of a pinui-binui compound, on the local authorities track or on the taxation track.

Administrations

Urban renewal administrations in the local authorities, which help apartment owners with information and support.

Arnona (municipal tax)

Regulations granting an arnona discount on the additional area, for a limited period and subject to conditions.

Urban Renewal (Agreements for Organising Transactions) Law, 5777-2017 (חוק התחדשות עירונית (הסכמים לארגון עסקאות), התשע״ז-2017).

What it regulates

The activity of organisers, meaning anyone who organises the apartment owners in order to advance a renewal transaction: duties of fairness and loyalty, delivery of material information, and the possibility of determining that an organisation agreement has expired.

Real Estate Taxation (Appreciation and Purchase) Law, 5723-1963 (חוק מיסוי מקרקעין (שבח ורכישה), התשכ״ג-1963); Value Added Tax Law, 5736-1975 (חוק מס ערך מוסף, התשל״ו-1975).

Chapter Five 4

Pinui-binui. Section 49כב exempts from land appreciation tax (mas shevach) the apartment owner who sells their rights to the developer, up to a ceiling. The 2023 amendment added a definition of "beneficiary seller".

Chapter Five 5

Strengthening and TAMA 38, and from 2023 also building renewal under the Shaked plan.

VAT

Sections 31A and 31B of the Value Added Tax Law set VAT at a zero rate on the construction services that the developer provides to the apartment owners in these transactions.

Rent

Whether the rent is taxable has not yet been settled, although there is a position that the rent is exempt from tax as part of the consideration in the transaction with the owners. In any case, consult a professional, as each case is examined on its own facts.

Sale (Apartments) (Assurance of Investments of Apartment Purchasers) Law, 5735-1974 (חוק המכר (דירות) (הבטחת השקעות של רוכשי דירות), התשל״ה-1974).

In urban renewal

Under the agreement, the developer provides the apartment owners with a guarantee under the Law for the value of the new apartment, until the apartment is handed over to its owner and a warning note or the ownership is registered in the owner's favour, as set in the agreement. Alongside it, a rent guarantee, a tax guarantee and a registration guarantee are customary.

War Damage Rehabilitation by Way of Urban Renewal Law, 5786-2026 (חוק שיקום נזקי מלחמה בדרך של התחדשות עירונית, התשפ״ו-2026). Sefer HaChukim 3521.

Sections 3-13

Declaration by the government of a rehabilitation and renewal area, within 60 working days of the date of the damage.

Section 2

Special majority: a majority of the apartments in a majority of the buildings, or four fifths of all the apartments in the area.

Sections 14-30

A planning track with fixed deadlines, and a permit with the consent of 51%. Betterment levy: a quarter under the Law, but the local authority may set half or an exemption, and in practice many local authorities have kept a rate of half.

Section 45

Funding from the Compensation Fund for purchasing the rights of apartment owners who chose to exit.

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