Buying ownership from the Israel Land Authority: when it pays, and when it does not

Three terms before the calculation

Capitalized lease: the lease fees for the entire lease period were paid in advance, in a single payment. Most new apartments are sold this way.

Non-capitalized lease (annual lease fees): the lessee pays the ILA lease fees every year, and on every sale the ILA also charges consent fees.

Acquiring ownership: converting the leasehold into ownership. A precondition is that the lease is capitalized, or that the ILA recognized it as notionally capitalized (Procedure 90.01B, section 1.6). Ownership is a right, not an obligation, and a lessee may refuse it even when it is offered free of charge (section 1.7).

What it costs: the ILA table

According to the summary table in Procedure 90.01B (published 26.10.2025), for a capitalized residential property:

The rates do not include VAT, taxes, past debts or other payments to the ILA. The land value is set by an ILA appraisal as of the date payment is demanded. Above 16 dunams the ILA does not transfer ownership unless the Israel Land Council decides otherwise (section 4KA of the Israel Land Authority Law, 5720-1960).

Note the jump between brackets: the rate applies to the whole land value, not only to the part above the threshold. On a 545 sq m plot you pay 9% of the entire value, and on a 535 sq m plot 4.5%. So it is worth checking that the area in the lease contract and in the plan is correct.

What you get for ownership

According to the ILA service page, a person registered as owner, or who received a "certificate of entitlement to ownership":

• does not need ILA approval for a permit for additional construction, plot subdivision, change of designation or non-conforming use, and does not pay the ILA for that consent;
• deals directly with the Land Registry and the local planning committee, without going through the ILA;
• has no lease period that ends and requires paid renewal.

A lessee who remains a lessee remains dependent on the ILA. Even with a capitalized lease, a transfer of rights requires the ILA's written consent, although no consent fees are charged (Procedure 90.03B, sections 1.1 and 1.4).

Example 1: an apartment in a multi-unit building, capitalized lease

Ownership is granted free of charge. The ILA usually sends a notice, and the lessee has 60 days to object. If there is no objection, the ILA registers the lessee as owner.

Bottom line: almost always worth it. The cost to the ILA is zero, and a future sale is simpler.

The exception: if the building has not yet been registered as a condominium, the apartment is not a separate registration unit, and you receive only an "upgraded lease": the benefits of ownership, without registration as owner and without the exemption from ILA approval for transfers of rights.

Example 2: a non-capitalized apartment about to be sold

Suppose the land value attributed to the apartment under the ILA appraisal is ₪900,000 (an illustrative figure only).

Option A, capitalize: a property that was not capitalized in the capitalization campaigns and was not recognized as notionally capitalized pays 5.5% of the land value, plus past debts (Procedure 90.04B, section 5.3.2.4). Here: 900,000 × 5.5% = ₪49,500, plus VAT. After capitalization the apartment is eligible for ownership free of charge.

Option B, sell without capitalizing: under most contracts, consent fees are one third of the increase in land value (Procedure 90.03B, section 12.6.1). If the appraisal shows an increase of ₪450,000, the consent fees will be ₪150,000, and the buyer will still receive a non-capitalized apartment.

Bottom line: in this example capitalizing is three times cheaper. In practice there is no need to guess: when a transfer of rights is requested in a non-capitalized property, the ILA makes two calculations, one for consent fees and one for capitalization fees, and the lessee chooses (Procedure 90.03B, section 12.2).

Check first: a lessee who did not pay annual lease fees at 1% in the years 2008 to 2014 may be required to pay 7 years of fees to be treated as "notionally" capitalized (Procedure 90.04B, section 5.3.2.3). It is worth asking the ILA for a statement of debts before deciding.

Example 3: a detached house on a 400 sq m plot

Suppose a land value of ₪2,400,000 (illustrative only), a capitalized lease, outside a national priority area.

Cost of ownership: 2,400,000 × 4.5% = ₪108,000, plus VAT.

What it saves:

• Lease renewal: in low-rise construction, at the end of the first capitalized lease period, a lessee who did not join the ownership track pays 5.5% of the land value to capitalize another 49 years (Procedure 90.04B, section 5.3.2.1). At the same value: ₪132,000. So a lessee whose lease ends in a few years will save more than the cost of ownership.
• Additional construction: an owner does not need ILA consent for a permit and does not pay for it. A lessee who uses additional rights not paid for may be charged permit fees, according to Council decisions and an appraisal. For a preliminary estimate of permit fees for additional area in a detached house, the ILA offers a permit fee calculator in its personal area (Hebrew).

When it pays less: when the lease period is long (say, forty more years), there is no plan to extend the house, and no intention to sell soon. In that case the decision can wait. But the payment is set by the land value at the time of the demand, so if land values rise, the price of ownership rises too.

Example 4: a 700 sq m plot

At a land value of ₪4,000,000 (illustrative only), outside a national priority area: 4,000,000 × 9% = ₪360,000, plus VAT. Here the calculation is very sensitive to the land value and to future plans. If you plan to subdivide the plot or add a housing unit, the exemption from ILA consent and payment may justify the cost. If not, it is worth requesting an appraisal and comparing it with the expected renewal cost at the end of the lease.

When ownership will not be offered, or only on special terms

• Plot over 16 dunams: the ILA does not transfer ownership, except by Council decision.
• Breach of contract or construction without a permit: must be regularized first. A permit-fee debt for additional construction already carried out is also paid as a condition for ownership (Procedure 90.01B, sections 6.1.3 and 6.1.4).
• Metro influence zones (National Outline Plan 70): Procedure 90.01B (section 6.1.9) states that a plan deposited from 1.1.2023 that improves "enhanced land" within the influence zone of metro stations makes the landowner liable for a 40% betterment levy and, in addition, a metro tax of 35% of the betterment. Accordingly, under the procedure, ownership will not be offered in properties defined as "enhanced land". A lessee who nevertheless asks to buy ownership signs an undertaking that ownership is granted without offsetting the metro tax, and that no claims will be raised against the ILA on this matter in the future. This is a clear case for stopping and checking before applying.
• Small community settlement or agricultural settlement: the consent of the cooperative society or the Agency is required (section 3.4).

KKL land versus State and Development Authority land

All three are "Israel Lands", and all three are managed by the Israel Land Authority. The difference is the registered owner, and it affects the possibility of registration as owner.

The legal basis: Section 1 of Basic Law: Israel Lands prohibits transferring ownership of State, Development Authority and KKL lands, except in cases set by law. The 1961 covenant between the State and KKL allows ownership of KKL land to change mainly by way of land exchange. That is why the Council decision on transferring ownership does not apply to KKL land. The ILA states that it is working on land exchanges and has begun registering ownership centrally in the names of thousands of lessees on KKL land.

What this means in practice for a lessee on KKL land: economically, the lessee's position is similar to an owner's: the same benefits apply, such as exemption from consent and from payment for an additional-construction permit. But the land register will continue to show the lessee as lessee until the ILA completes the exchange and central registration, and this cannot be hastened by an individual request. In a transaction, the contract should address this explicitly.

In all three types: when ownership is registered under the reform, a note is recorded restricting the transfer of rights to a foreigner, as defined in the Israel Lands Law.

How to decide: five questions

1. Is the lease capitalized? If not, start with the capitalization versus consent fees calculation (Example 2).
2. What is the property type and plot size? An apartment in a multi-unit building or a plot up to 280 sq m: free. Above that: 4.5% or 9% outside priority areas.
3. When does the lease period end? The closer the end, the more ownership pays (Example 3).
4. Are you planning additional construction, subdivision or a sale? Each of these increases the benefit.
5. Is the property in a metro influence zone? If so, stop and check before any application.

Official ILA links

• Request to purchase ownership rights in land: the service page, the application form and required documents.
• Transfer of ownership under the reform (Hebrew): the ILA's explanation, forms and guidelines for registering a sale in Israel Lands.
• My ILA (Rami Sheli) (Hebrew): the personal area. Login is through the national identification system, and the system locates your properties without a file number. There you can see property details and documents, and request a confirmation of rights.
• Permit fee calculator (Hebrew): a preliminary, non-binding estimate for added built area in an existing detached housing unit, through My ILA. It is not a calculator for the cost of ownership.
• Procedure 90.01B (acquiring ownership or upgrading a lease), as published on the ILA website (Hebrew).

The ILA has no calculator for the cost of ownership itself. The amount is set by an appraisal of the land value, which the ILA carries out after the application is filed. You can multiply the rates in the table above yourself, for an estimate only.

Related articles and pages: Acquiring ownership from the Israel Land Authority | Buying a plot | Buying a second-hand apartment | Selling an apartment | Land registry extract guide