Building Rights

The apartment is sold with a ‘dowry’ in the form of building rights. As I was writing this book, I understood why clients tend to get confused about this term of building rights, which is sometimes referred to as building percentages.
The reason for the confusion probably lies in the term itself. Building rights are not rights at all, certainly when it comes to the owner of the rights in the apartment. The term construction percentage is also misleading because there is no match between the term building rights and the owner of the rights in the apartment.

Section 1 of the Planning and Building Regulations (calculation of areas and percentages of construction in the plan and permits) stipulates that the percentage of construction is the ratio between the total area permitted for construction on the land and the land area.
This value is expressed as a percentage.

Hence the term ‘construction percentage’ is a term from the world of planning and not from the world of property or contract. The terms “building rights” or “construction percentages” express the possibility of utilizing the land for construction according to the relevant master plan. Building rights actually determine the option of using the land for construction according to the law, and this possibility is one of the data that defines the potential of the use of the land, and thus its monetary value, of course.

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Apartments in Israel
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Average price for a 4 room apartment in Tel Aviv
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Rise in the price index of input in residential construction from the year 1956 to 2021
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