Buying from a developer
Building Inputs Index Linkage Calculator
The calculator works out the linkage differentials that the developer may charge on each payment, according to the contract date: for a contract signed on or after 7 July 2022, within the limits of section 5C of the Sale (Apartments) Law; for an earlier contract, according to its terms. The index data is retrieved from the CBS.
Disclaimer. The calculator provides an estimate only, based on the data entered and the assumptions set out here. It does not constitute legal advice, a professional opinion or an undertaking as to any outcome, and should not be relied on without review by an advocate. The binding text is that of the law and the contract, and the actual calculation may differ depending on the circumstances. The office is not liable for any loss caused by use of the calculator or by reliance on its results.
How much linkage may the developer charge?
In a contract signed on or after 7 July 2022, the short answer is: on no more than half of each payment, and only if this was agreed in the contract. Section 5C of the Sale (Apartments) Law, added by Amendment No. 9 to the Law, provides that a payment for the purchase of an apartment shall not be linked to any index. The parties may agree that up to half of each payment will be linked to the Building Inputs Index, provided that 20% of the price, paid on signing or before any other payment, is not linked.
Until when does linkage continue?
Until the delivery date set in the contract, and not beyond it. If the developer is late in delivering, a payment made after the contractual date is linked only up to the index known on the contractual delivery date. The exception: a delay caused solely by the buyer, or by circumstances to which section 18(a) of the Contracts (Remedies) Law applies. The calculator has a box to tick for this exception.
And what about a contract signed before 7 July 2022?
Section 5C does not apply to such a contract, and linkage is governed by the terms of the contract. In many contracts from that period the entire price is linked, sometimes except for a first payment. In the "Under the Sale Law" tab, where the signing date is earlier than 7 July 2022, the calculator lets you enter the linked portion, the payments that are not linked and whether linkage stops at delivery, as written in the contract.
Which index applies to each payment?
Under section 5C(d), the determining index is the Residential Building Input Price Index "last published before the linkage date". According to the CBS, the price indices (the Consumer Price Index and the Building Input Price Index) are published on the 15th of the month at 18:30, or, if the 15th falls on a Saturday or a holiday, on the preceding working day. A month's index is therefore treated as known from the day after its publication. For each payment, the results table shows the month of the index used and its value, so that you can check every line against the statement the developer sent.
What should you check in the developer's statement?
- That the linked portion does not exceed half of the payment, and that the first payment (20%) was not linked.
- That the base index is the index set in the contract, and not a later one.
- That no linkage was charged for the period after the contractual delivery date.
- If the index fell: what the contract provides about a fall in the index.
More information on contracts with a developer, the security for your money and late delivery can be found on the Buying an Apartment from a Developer page and in the Compensation for Late Delivery calculator.
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Questions and answers
Can the developer link the entire price to the index?
In a contract signed on or after 7 July 2022: no. Under section 5C of the Sale (Apartments) Law, the parties may agree to link up to half of each payment to the Building Inputs Index, and 20% of the price paid on signing is not linked.
Does linkage continue when the developer is late in delivering?
As a rule, no. Linkage stops at the delivery date set in the contract, unless the delay was caused solely by the buyer or by circumstances within section 18(a) of the Contracts (Remedies for Breach of Contract) Law.
Where does the calculator get the index from?
From the official API of the Central Bureau of Statistics: the Residential Building Input Price Index (general). The data is retrieved with every calculation, so it is up to date with the latest published index.
Not sure the deal is safe? Let's start with a conversation
In an initial conversation we will go over the property, the other party and the payment schedule, and tell you what needs to be checked before you sign.