Urban renewal in Israel in 2026 looks different from anything apartment owners have known over the past twenty years. TAMA 38 expired for good on May 18, 2026, and in its place today there are pinui binui (evacuation and reconstruction) projects, urban renewal plans that each city prepares for itself, and a relatively new track known as the “Shaked alternative” (chalufat Shaked). Tel Aviv is a special case: the municipality chose not to use the general substitutes and is advancing a comprehensive plan of its own. This guide explains to apartment owners what the tracks are, what owners usually receive, what is truly tax exempt, which majority is required and how to choose a developer and a lawyer. We follow ongoing developments in the neighborhoods of north Tel Aviv and in Ramat Hasharon separately, in our review of urban renewal in north Tel Aviv and Ramat Hasharon.
What changed in urban renewal in Israel in 2026: the end of TAMA 38
TAMA 38 was a national master plan for reinforcing buildings against earthquakes. It made it possible to obtain a building permit for a single building, either reinforcement with added floors or demolition and reconstruction, without going through a full town building plan (taba) procedure. In most cities it already expired in 2024. Cities that submitted a replacement plan on time received an extension until May 18, 2026 or until their own plan was approved, whichever came first, and in May 2026 it expired for good throughout the country.
What remains after it depends on the city:
- Cities with an approved replacement plan. Reports from 2024 listed Herzliya and Ramat Hasharon among them. In these cities single building renewal continues, under the rules of the municipal plan rather than TAMA.
- Cities that received an extension. These included, among others, Ra’anana and Kfar Saba. If their replacement plan was not approved by May 2026, a gap arises in which there is no active single building track until it is approved.
- Tel Aviv. The municipality announced back in 2024 that it would not extend TAMA, and is advancing plan TA/5555 instead. More on this below.
Because the situation varies from city to city and from month to month, before any decision you should check with the municipal planning department what applies to the specific plot.
Three tracks: pinui binui, single building demolition and reconstruction, reinforcement and additions
| Track | Scope | Planning procedure | What happens to residents |
|---|---|---|---|
| Pinui binui | A compound of several buildings, sometimes dozens | A town building plan for the compound, followed by permits | Residents move out for the construction years and receive alternative rent, and at the end a new apartment in a new building |
| Single building demolition and reconstruction | One building, sometimes two adjacent ones | Under a replacement municipal plan or the Shaked alternative, wherever they apply | Residents move out for the construction period, which is usually shorter than in pinui binui |
| Reinforcement and additions | An existing building | A permit under the applicable municipal plan | Residents stay in their homes during the works and usually receive a safe room (mamad), an elevator and a renovated facade |
In Tel Aviv and the Sharon cities, most buildings from the late 1950s to the 1970s, three and four storey blocks on pillars, are the natural candidates for the first two tracks. Small plots are better suited to a single building, while compounds of older housing estates with large open spaces are better suited to pinui binui.
The Shaked alternative: what it is and why it has not solved the problem
The Shaked alternative is the common name for Amendment 139 to the Planning and Building Law. The amendment was meant to allow local committees to approve single building renewal through a local plan, in a procedure that shortens the route compared with a regular town building plan. On paper this was the national replacement for TAMA 38.
In practice the picture is disappointing. In June 2026 Merkaz HaNadlan reported, citing officials at the Urban Renewal Authority, that until then not a single building permit had been issued under this track, and that the state has no complete data on how local authorities are applying it. In Tel Aviv the track was not adopted at all. What this means for apartment owners: when someone offers you a project “under the Shaked alternative”, ask to see exactly which plan is involved, what stage it is at and who approved it.
Tel Aviv: the Rova’im plan and plan TA/5555
In Tel Aviv there are currently two main tools for renewal at the building level, alongside pinui binui in compounds.
The Rova’im plan for Quarters 3 and 4
A detailed plan covering the Old North and parts of the city center, setting rights and provisions for every plot. It continues to apply after TAMA expired, so streets within its boundaries have a clear route to reinforcement and to demolition and reconstruction.
Plan TA/5555
This is the municipal plan intended to replace TAMA 38 in the rest of the city. According to publications from July 2025, when the local committee recommended depositing it with the district committee:
- It covers about 1,720 plots in neighborhoods outside the city center and outside areas that already have a detailed plan, such as the Rova’im.
- In the north of the city it includes, among others, Ramat Aviv Alef, Ramat Aviv Bet, Hadar Yosef, Neot Afeka and Ganei Tzahala. Not every northern neighborhood is included, so check by address.
- It offers two tracks, demolition and reconstruction or reinforcement and densification, and allows a permit to be obtained from the licensing authority without preparing a detailed plan for each building.
- It includes a 25% reduction in the betterment levy (hetel hashbacha), rather than the full exemption that existed under TAMA 38, and requires public areas and public uses to be integrated.
As of writing, in October 2026, the plan is still in approval proceedings at the district committee and has not come into force. Until it is approved, buildings within its boundaries cannot obtain a permit under it. Check its current status on the municipality website or in the government planning system before any decision.
What apartment owners usually receive
There is no standard consideration. It is determined by the rights the plan allows, by the land value and by the economic feasibility for the developer. In a typical renewal deal, in which apartment owners pay nothing, the package usually includes:
- A new apartment larger than the existing one, including a safe room.
- A sun balcony, and sometimes a storage room.
- Parking, subject to the municipal parking standard and to what the plot actually allows. In Tel Aviv the standard is restrictive, and not every apartment will receive parking.
- An elevator and a new lobby.
- Alternative rent for the entire construction period, and moving expenses in both directions.
No less important than the consideration are the securities. A good agreement includes a Sale Law guarantee or a bank guarantee on the new apartment, a guarantee for the rent payments, a performance guarantee, insurance, timetables with penalties for delay, and fees for a lawyer, appraiser and supervisor acting for the residents, financed by the developer. If you are considering buying an apartment in such a project from the developer’s side, the considerations are different, and we set them out in the article on buying a new apartment in a renewal project.
Taxes and reliefs in urban renewal in Israel: what is truly exempt
The claim that “everything is exempt” is not accurate. Here is the general picture, each element of which requires review by a lawyer or tax advisor for the specific transaction:
- Capital gains tax (mas shevach). The Real Estate Taxation Law includes exemptions for apartment owners in pinui binui and in demolition and reconstruction, but they are limited. In general the exemption applies to a replacement apartment that is no more than about 25 sqm larger than the old apartment and does not exceed a set value ceiling. Anything beyond that may be taxable. In 2026 the Israel Tax Authority published a position under which a replacement apartment received by an heir is treated as a continuation of the inherited apartment for purposes of the exemption, under certain conditions. The general background to tax on a sale is in our guide on capital gains tax.
- Purchase tax (mas rechisha). Apartment owners receive an exemption on the replacement apartment in pinui binui and demolition and reconstruction deals, subject to conditions and correct reporting. The exemption is not automatic.
- VAT. The construction services the developer provides to apartment owners are subject to VAT at a zero rate, so the owners do not bear it.
- Betterment levy. Here the difference between the tracks is large. Under TAMA 38 there was a statutory exemption. In pinui binui the exemption depends on the decision regarding the compound. Under plan TA/5555, according to its proposed wording, the levy is reduced by 25% and not cancelled. In a good “net” agreement, the developer bears the levy and all taxes that apply to the transaction, and this is a clause the residents’ lawyer should check with particular care.
Required majority and the refusing tenant
The Evacuation and Reconstruction Law sets the “special majority” required for a transaction:
- In a pinui binui compound, the owners of at least two thirds of all apartments in the compound, subject to additional conditions for each condominium within it.
- In a condominium of four or five apartments, the owners of at least three apartments, provided that the building has more than two apartment owners.
Once the majority has been reached and an apartment owner refuses without a reasonable cause, the court may order that owner to compensate the other apartment owners, or approve the transaction and appoint a lawyer to sign it in that owner’s name. On the other hand, a refusal based on unreasonable consideration, missing securities or special personal circumstances may be considered reasonable. For apartment owners aged 75 or over at the time the first transaction is signed, the law requires that alternatives be offered, such as moving to assisted living, an alternative apartment or monetary consideration.
The rules in a single building that is not part of a pinui binui compound are set by the track and the law that apply to it, so the majority required in your building is checked by the residents’ lawyer.
How to choose a developer and a lawyer for the residents
The most expensive mistake in urban renewal usually happens at the start: signing too early, with the first party who knocked on the door. A recommended order of steps:
- Choose a representative committee. Three to five apartment owners who represent the building and coordinate contact.
- Choose a lawyer for the residents before the developer. A lawyer with no connection to the proposed developer, experienced in similar projects in the city. The fees are usually financed by the developer in the end, but the lawyer represents only you.
- Request several proposals. Compare developers on the same specification: consideration, securities, timetables and exit terms.
- Check the developer. Projects completed, not just projects signed, financial strength, bank accompaniment, open lawsuits. It is worth visiting a building the developer has delivered and speaking with residents.
- Request an appraisal opinion. An appraiser acting for the residents checks whether the consideration is reasonable relative to the rights.
- Insist on exit terms. What happens if the developer does not obtain a permit within a defined period. An agreement without an exit date may tie a building down for years.
Anyone selling an apartment in a building at one of these stages needs to know how the project stage affects the price and what is presented to the buyer. We cover this in the article on selling in a building undergoing urban renewal. To get to know the character of the buildings in each neighborhood, see our guide to north Tel Aviv neighborhoods.
Frequently asked questions
Does TAMA 38 still exist in 2026?
No. It expired for good on May 18, 2026. Applications submitted before then usually continue under the rules that applied at the time of submission, but new applications are filed only under a replacement municipal plan, the Shaked alternative or a detailed plan, depending on what applies in the city.
What replaces TAMA 38 in Tel Aviv?
The Rova’im plan for Quarters 3 and 4 in the Old North and parts of the city center, and plan TA/5555 in other neighborhoods, which is still in approval proceedings. Alongside them, pinui binui projects in compounds continue.
How long does a pinui binui project take?
It is a multi year process: organizing and collecting signatures, preparing and approving a plan for the compound, permits, evacuation and construction. Each stage depends on the authorities, on objections and on the pace of signatures, so any timetable a developer presents should be weighed against the stage the project has actually reached.
Do apartment owners pay anything in a renewal project?
In a typical “net” deal, no. The developer bears the construction costs, the alternative rent, the advice to residents and the taxes that apply to the transaction. Possible exceptions are additional space an owner asks to buy, or tax on consideration that exceeds the exemption limits.
What do I do if my neighbors want to move forward and I do not?
First understand what bothers you: the consideration, the securities, the developer or a personal situation. Many concerns are resolved in the agreement. If the refusal continues after the required majority has been reached, whether it is reasonable will be decided on the circumstances of the case, so it is important to get legal advice early.
Urban renewal in Israel in 2026: the next step
Urban renewal in Israel in 2026 calls for more checking than in the past: which plan applies to the plot, what stage it is at, and what the agreement really guarantees. If you are considering selling, buying or simply understanding what it means for your apartment in north Tel Aviv or in Ramat Hasharon, we at RS Nadlan would be happy to talk. You can leave your details on our contact page or call 077-500-4600 (from abroad, +972 77 500 4600).
The information in this article is general and correct as of the time of writing. It does not constitute legal, planning or tax advice, and the details of every building and transaction should be checked with a lawyer, an appraiser and a tax advisor.
