Exemption from the improvement levy

Similar to appreciation tax and purchase tax, which include exemption or relief, appreciation tax also includes exemption or relief.
The most common exemption is the sale of a residential apartment with building rights for expansion, where the exemption is up to a size of 140 square meters gross.
Section 19 (c) of the Third Edition provides:

(1) The construction or extension of a residential dwelling shall not be regarded as the exercise of rights if the holder of the land or his relative has applied for a building permit for the same land to be used for his residence or the residence of his relative provided that the total area of the dwelling does not exceed 140 square meters. Any additional construction or extension above the said area shall be subject to a levy, at a rate proportional to the size of the additional construction or extension.

(2) The transfer of ownership or possession of an apartment built or expanded as stated in paragraph (1) or which can be expanded according to plan, shall not be considered an exercise of rights and the obligation to pay the levy shall not apply if the landlord or relative used the apartment. For a period not less than four years. ”
The legislature’s motive for granting this exemption is primarily social, helping citizens improve their living conditions, and it was also intended to contribute to the rehabilitation of distressed areas and the relief of housing distress.

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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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