Increasing Construction Rights on Land (Comprehensive Guide)
- HLK Staff
- Jul 2
- 4 min read
By HLK, The Land Realization Company
In the following guide, we will explain everything you need to know about the process of increasing construction rights on land, its advantages, and how it actually works.
What Are Construction Rights on Land?
To understand what expanding construction rights means, we first need to clarify what construction rights are in the first place.
Construction rights serve as a mechanism to regulate and organize real estate activity, preventing a situation where landowners build however they please in a way that might contradict the public interest.
This is a crucial tool held by state authorities for urban development and planning. For instance, construction rights make it possible to prevent over-density or property shortages in a given area.
In Israel, these rights are legally anchored in the Town Planning Scheme (TABA) applicable to a specific area, which defines the permitted scope of construction. These planning rights dictate the number of square meters that can be built on a plot as well as their designated use (e.g., residential, commercial, office space, etc.).
What Does Expanding Construction Rights Mean?
Even though the permitted scope of construction is legally set in the Town Planning Scheme, these rights can be expanded in certain cases if specific conditions are met.
Alongside the existing building percentages, statutory plans by the state's planning bodies can include potential rights to expand the buildable area. Additionally, due to Israel's growing population density and the dwindling amount of available land for construction, municipal authorities frequently promote the expansion of these rights.
To make the most of high land values, building percentages are being increased in many areas across the country — particularly on lands located near infrastructure. In some cases, municipalities will also add new "uses" to the land, such as adding residential units to office complexes, or adding commercial space to residential lands.
Ultimately, increased construction rights allow landowners to build over a larger area. This significantly boosts the profit potential and overall value of any property for sale in israel once it is developed. The municipality also benefits from this expansion: it gets to develop its jurisdiction to meet population needs, while also collecting a "betterment levy" (tax) that serves as municipal income. Residents, in turn, gain housing solutions and a response to the growing need for offices and bustling commercial areas.
In short, when planning is executed properly, expanding land rights benefits everyone involved — landowners, local authorities, and residents alike.
The Importance of Empowering Rights for Real Estate Investors
The topic of increasing construction rights is especially relevant for anyone looking to invest in real estate in israel. This is particularly true for those considering purchasing agricultural land undergoing "thawing" (rezoning for construction) and betterment, or land that has already been rezoned and is subject to new plans.
In these scenarios, a plan change that empowers construction rights can significantly boost the value of the investment. For example, if a plot is designated for residential buildings, increasing the scope of construction allows for more units to be built for rent or sale, thereby driving up the land's overall value.
Since local authorities often initiate these processes themselves, purchasing land in a municipally promoted project is the most effortless way to enjoy expanded rights. The landowner benefits from the additions without having to spearhead the bureaucratic process.
How Can You Increase Construction Rights Independently?
In principle, to increase construction rights beyond what is defined in the master plan, you must submit a formal application to the local and/or district planning and building committee.
However, the much simpler route to enjoying these benefits is to focus your search for land for sale in Israel on plots that are already undergoing this expansion process initiated by the municipality.
Investing in Land with the Potential to Double Construction Rights
The Land Realization Company provides close consulting and accompaniment services for investments in projects that have the potential for doubled rights.
Through this model, investors can purchase land, enjoy the natural value appreciation as the zoning plan progresses (or the large profit post-construction), and receive additional construction rights for free, at no extra cost. This translates to an expectation of even higher yields without raising the initial investment price or expending personal effort to expand the rights.
Expected Projects with Doubled Rights:
ICON Ashdod Project: A mixed-use complex featuring small residential units alongside businesses, shops, and offices, located strategically near the city's train station. The municipality is promoting a 2.6-fold increase in construction rights here, adding small apartments to the plan. This means early investors are expected to receive an additional office and an extra apartment at no cost (Note: all units are already sold out).
ICON Energy Project in Hadera: A unique business complex where the land has already completed the rezoning process and is ready for immediate construction. Currently, the company and the Hadera Municipality are drafting a policy document to empower the rights so residential units can be added to the commercial spaces.
The New Business Complex (Mul Park Raanana): Located opposite the park in Raanana, this project will include 145,000 square meters of office and employment space adjacent to the train station, currently in the planning stages.
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