Israel's Housing Programs Cost State Nearly $11 Billion

Israel's "Discount Housing" programs, which began as "Price for the First Buyer" in 2017 and have continued under various names, have resulted in significant financial losses for the state. According to Israel's 2025 financial reports, the government has lost approximately 40 billion shekels (about $11 billion USD) due to these initiatives.

The losses stem from two main sources: the state not selling land at a higher price and the direct funding required for the projects. The Ministry of Finance's Accountant General, Michal Abadi-Boiangiu, stated that state assets are valued at 2.167 trillion shekels, with state lands alone worth over 1.1 trillion shekels.

Since the beginning of 2022, the "Discount Housing," "Reduced Price," and "Target Price" programs have incurred a loss of about 26 billion shekels. An additional 10 billion shekels were lost due to foregone revenue from these programs. The state also spent hundreds of millions of shekels on subsidies, including approximately 1 billion shekels for development subsidies and 500 million shekels in grants to buyers.

In total, the state spent 27.2 billion shekels to subsidize discounted apartments. When combining all expenses and lost revenue, the total financial impact reaches around 40 billion shekels. This substantial expenditure was intended to provide subsidized housing, but some recipients "turned a profit" by selling their apartments shortly after receiving them, often after delays in permits meant they could sell within seven years of winning the lottery.

Previously, the eligibility criteria allowed homeowners to enter the lottery, meaning the subsidies did not always reach those most in need. The state failed to adequately monitor recipients who sold their apartments without residing in them, and instead of focusing on broader market price reductions through developer subsidies, it concentrated its efforts on this specific program.