Ramat Gan City Council May Demand Substantial Levies on Sale of Older Apartments

Homeowners in Ramat Gan selling older apartments may face unexpected financial burdens due to a new municipal plan effective since January 2026. This plan formalizes previously granted building easements as statutory rights within the city’s zoning framework, enabling the municipality to impose betterment levies (heytel hashbacha) at the time of property sale, even if the apartment is sold in its current condition without any construction permits requested. Several cases have already seen sellers charged such levies, prompting appeals and legal scrutiny over the plan’s legality and potential spread to other cities.

The betterment levy typically amounts to 50% of the property value increase attributed to zoning changes or easements. For example, if a property appraiser estimates a 400,000 shekel value rise due to the plan, the levy could reach 200,000 shekels plus statutory adjustments. This levy can significantly impact the net proceeds from apartment sales. The Ramat Gan move follows a nationwide reform that largely ended the previous system of discretionary building easements from early 2025, replacing it with detailed statutory plans to reduce licensing delays and uncertainty.

Ramat Gan’s approach anchors some previously granted easements into the official plan, creating planning certainty and streamlining permits. However, it also triggers levy assessments upon sale for rights that owners may not have exercised or that depend on complex factors like building structure or co-owner consent. The valuation gap between registered rights and market value is expected to be a focal point in upcoming legal disputes.

This development coincides with a Supreme Court ruling in July 2026 limiting levies by excluding value increases already realized under prior urban renewal frameworks like Tama 38. The ruling, which rejected further appeals by Tel Aviv and Jerusalem municipalities, restricts levy claims on previously accounted value increments. Nonetheless, there is concern that other municipalities might adopt similar plans to convert conditional rights into vested rights, preserving a key revenue source for funding public infrastructure and services.

Ramat Gan homeowners planning to sell should investigate applicable plans and seek professional appraisals to assess potential levy liabilities. Levy assessments can be contested through local committee appraisers or appeals within 45 days of notification. The unfolding legal outcomes will have implications beyond Ramat Gan, potentially affecting urban property markets across Israel.