Home » Israeli State Land: What Your Leasehold Really Means When You Buy, Sell or Pass On Your Property

Israeli State Land: What Your Leasehold Really Means When You Buy, Sell or Pass On Your Property

Do you believe you “own” your apartment in Israel? In many cases, what you actually hold is a long-term right over land that belongs to the State. The mechanism is not a defect, but it shapes how a property can be sold, extended or inherited, and sometimes what it costs. Here is what foreign buyers should check before signing.

I. Why most land belongs to the State

Roughly 93% of Israeli territory is public land, managed by the Israel Land Authority (רשות מקרקעי ישראל), often shortened to “the ILA” or “Minhal”. This land is not sold: it is made available to individuals through a Hakhira (חכירה), a very long-term lease comparable to a ground lease.

A buyer of an apartment therefore acquires the dwelling together with a leasehold right over the land. The remaining term, usually several decades and renewable, appears in the lease or in the rights certificate, not in the property listing.

II. Freehold or leasehold: how to tell

The first check is documentary. Depending on the case, the property is:

private freehold (Baalut (בעלות)), which is uncommon and recorded as such in the land registry
a lease registered in the land registry (Tabu (טאבו)), the most secure form
a right not registered in the Tabu, resting on contracts with the developer or the ILA, which calls for additional safeguards

A land registry extract (Nesach Tabu (נסח טאבו)) and a certificate from the ILA confirm the nature of the right, its remaining term and any encumbrances. The lease should also be read for the permitted use of the land, for instance residential use.

III. Lease renewal: not to be overlooked

Every lease eventually expires. For residential property, renewal rules have been substantially eased by successive ILA decisions, so that in many cases extension is provided for in practice at no significant cost. That protection is neither universal nor automatic: it depends on the type of lease, the use of the land and the date of signature.

Rates and conditions have changed several times and sources differ by category of property, so we deliberately give no figures. Only the lease itself and the applicable ILA decision can tell you what is owed.

IV. Fees and approvals that can arise during a transaction

During the life of the lease, certain operations require ILA approval and may trigger a payment:

a change of use, for example converting part of a home into business premises
an increase in building rights: an additional floor, an extension or an extra unit, for which Dmei Hetter (דמי היתר) may be charged to regularise the additional use or construction
the transfer of rights on a sale or gift, which requires registering the new holder and, in some cases, an ILA certificate

A seller who extended a home without regularising the rights may be asked to pay at the time of sale, or the registration may stall. It is wise to raise the question before the preliminary contract is signed.

V. Inheritance: does the lease pass to your heirs?

The lease passes to heirs like any other asset, but the transfer requires steps: a probate order (Tzav Yerusha (צו ירושה)) or a will probate order (Tzav Kiyum Tzavaa (צו קיום צוואה)), then registration in the heirs’ names with the land registry and the ILA. A lease left in a deceased person’s name blocks any later sale.

For owners living abroad, the interplay between foreign succession rules and Israeli procedures is among the most underestimated points.

VI. Checks to make before buying

Obtain the Nesach Tabu and confirm the nature of the right and who holds it
Ask for the remaining lease term and the applicable renewal conditions
Check the permitted use against the actual use of the property
Review any construction added by the sellers and whether it was regularised with the ILA
Provide in the preliminary contract who bears any sums due to the ILA

Conclusion – Why work with a lawyer in Israeli land law?

A leasehold is not a flaw in the property: it is the normal framework of ownership in Israel. The risk comes from not reading it. A lawyer checks the nature of the right, the remaining term, any outstanding obligations and how they are split between seller and buyer, before the price is paid. That upfront analysis avoids unpleasant surprises when you resell or pass the property on.

With this in mind, the law firm ABITBOL & ASSOCIES, drawing on its expertise in Israeli and international real estate law, assists its clients at every stage of verifying the rights that burden a property in Israel. Our lawyers make sure your interests are protected and that every step is completed in full security.