TAMA 38 Apartment Decision: Should You Buy Into Urban Renewal in 2026?
Decide whether a TAMA 38 project fits your timeline and Aliyah plan—step-by-step assessment with real risk factors for olim.
What TAMA 38 Actually Offers New Immigrants Right Now
TAMA 38 (National Outline Plan 38) was approved by the Israeli government in 2005 to strengthen older apartment buildings against earthquakes. In exchange for reinforcing an old building, the developer receives the right to add additional floors or units and sell them on the open market. For you as a new immigrant, this means a chance to buy into a renovated or expanded apartment—often cheaper than purchasing a finished unit—while the building gets safer and more modern.
The catch: You're entering a multi-year construction project. Your apartment won't be finished when you sign. You won't move in immediately. If your aliyah timeline is months, not years, TAMA 38 is not for you.
The Two Tracks: What Actually Gets Built?
Under TAMA 38/1, the existing building is retained and reinforced. The developer adds structural reinforcement, installs an elevator, adds protected rooms (mamad) to existing apartments, and typically adds 1.5 to 2.5 floors of new apartments for sale. Existing residents remain in their apartments throughout most of the construction.
Under TAMA 38/2, the entire building is demolished and rebuilt. Residents are temporarily relocated, typically within the same neighborhood, at the developer's expense until the new building is ready. This track takes longer but results in a completely new structure.
Which track requires fewer approvals?
Only 66% of apartment owners need to agree for a TAMA 38/1 project to proceed. This lower threshold makes these projects easier to implement than full demolitions. If your building is considering TAMA 38, the 66% rule is critical: developers are more likely to push forward even if some owners resist.
Timeline Reality: Months, Not Weeks
| Stage | Typical Duration | What You're Doing |
|---|---|---|
| 1. Agreement signed (building owners + developer) | 1–3 months | Reviewing contract, getting legal review, negotiating terms |
| 2. Planning permit approval | 6–24 months | Waiting for municipality; construction cannot start |
| 3. Construction phase | 18–36 months | Living in disruption (TAMA 38/1) or in temporary housing (38/2) |
| 4. Handover and registration | 2–6 months | Receiving keys, paying final balances, registering ownership |
| Total: 3–5 years minimum from agreement to move-in | ||
The process typically takes 3–5 years from start to finish. The planning permit process can take 1 to 3 years and may involve hearings, objections from neighbours, and conditions. If you make Aliyah in 2026 and want to be in your apartment by 2027, TAMA 38 will not meet your deadline.
Why does the permit stage take so long?
The local municipality reviews structural plans, environmental impact, traffic, and neighbor objections. In high-demand areas like Tel Aviv or Jerusalem, hearings alone can add months. You cannot begin construction until the permit is final.
Financial Reality: What Does This Actually Cost You?
Appraisers estimate that the value of apartments may increase by 15–30 percent, with no financial expense on the part of the residents. That sounds perfect—but the reality is more complex.
Who pays for what in a TAMA 38 deal?
The developer finances the structural work, earthquake reinforcement, and new floors they will sell. But you as the original apartment owner are responsible for a share of shared costs: new elevators, stairwell renovation, facade work, parking improvements, and mamad (secure room) installation in your unit.
Factor an additional 10–15% of property value for various taxes and fees associated with TAMA 38 purchases. If you buy into a TAMA 38 project at the pre-construction stage, expect to pay this on top of your purchase price once construction begins.
Additionally, once the project is complete, larger, renovated apartments mean higher annual property taxes and homeowners association fees. New amenities like elevators require ongoing maintenance.
What tax benefits exist for apartment owners in TAMA 38?
Apartment owners are exempt from betterment levies at the permit stage, enabling them to enhance their property value tax-free. This is the core financial incentive. However, if you later sell the apartment after the project completes, the higher property value may affect your capital gains calculation.
The Legal Minefield: What You Must Do Before Signing
TAMA 38 involves signing a detailed agreement between you and the developer. This is not optional. A full legal agreement, typically running to dozens of pages, covers every owner's specific entitlements, the developer's obligations and guarantees, payment milestones, dispute resolution, and arrangements for vacating and returning. This agreement must be signed—and properly notarised where owners are abroad—by each participating owner.
If you live abroad and your building initiates a TAMA 38 project, you face a practical problem: You can sign the agreement documents before a notary public in your country of residence, have the signature apostilled, and courier the originals to your Israeli attorney. This can be time-consuming—allow several weeks. Alternatively, you can grant a power of attorney (yipuy koach) to your Israeli attorney, authorising them to sign the agreement and all related documents on your behalf.
What guarantees should be in your contract?
Guarantees include bank guarantees for your property's value, a guarantee for tax payments, a rental guarantee, a registration guarantee, and inspection guarantees. These are not decorative clauses. They protect your money if the developer runs out of funds or abandons the project. Missing or weak guarantees are a red flag.
How do you know if the developer is trustworthy?
Look for a signed agreement between residents and the developer, authority's approval already in place, and a developer with a proven history of delivering TAMA projects. If all you hear is
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Solly Marks is an Israeli property analyst and publisher writing for diaspora Jewish buyers and investors. JewishPropertyReport covers real estate prices, buying guides, and market data across Israel — practical intelligence for overseas buyers.