גוש דן

The End of TAMA 38 – What Replaces It in 2026 and What It Means for Property Owners in Gush Dan

TAMA 38, the national outline plan that accompanied the Israeli real estate market for nearly two decades and enabled the reinforcement of old buildings against earthquakes while adding apartments and floors, has reached the end of its road. The National Planning Council cancelled the plan back in November 2019, but repeated extensions postponed the actual end. Now, with the introduction of the Shaked Alternative (Amendment 139 to the Planning and Building Law) and municipal replacement plans, the reality is fundamentally changing for property owners in the Gush Dan area.

6 דקות קריאה

12 במרץ 2026

בקצרה

This change is not merely technical – it affects property values, building rights, betterment levies, and the timelines of urban renewal projects. Property owners in old buildings in Kiryat Ono, Ramat Gan, Givatayim, and other Gush Dan cities need to understand the new reality and act accordingly.

עובדות מפתח

TAMA 38 was cancelled by the National Council in November 2019. Repeated extensions allowed its continued operation until 2026 in certain cities.
9 municipalities have already approved a replacement plan, including Kiryat Ono, Holon, Herzliya, and Ramat HaSharon.
15 municipalities, including Ramat Gan, have submitted a replacement plan, and TAMA 38 continues to apply in them until May 2026 or until the plan is approved – whichever comes first.
Betterment levy: Under the Shaked Alternative, a default 25% betterment levy applies, compared to a full exemption that existed under TAMA 38.
The consent threshold for projects has dropped from 80% to 66% of apartment owners in a building.
Building rights under replacement plans can reach up to 400% addition, and in some cases even more.
A TAMA 38 project takes an average of 3-5 years, compared to a Pinui-Binui (evacuation-reconstruction) project that takes 5-8 years.

What Is the Shaked Alternative and How Does It Work?

The Shaked Alternative is the popular name for Amendments 136 and 139 to the Planning and Building Law, approved by the Knesset plenum in June 2022. Unlike TAMA 38, which was a uniform national plan, the Shaked Alternative transfers authority to local municipalities. Each city can now promote a replacement plan tailored to its needs – to the character of construction, infrastructure capacity, and population needs.

In practical terms, this means that while under TAMA 38 every old building built before 1980 was automatically entitled to additional building rights, under the replacement plans the municipality defines which complexes and buildings will be included, the scope of building rights, and the conditions. The advantage: plans are tailored to the city and consider infrastructure. The disadvantage: the process is longer and more complex.

Authority shifts from national to municipal level – each city sets its own rules
Amendment 139 allows building permits to be issued directly from the replacement plan, without requiring a detailed point-specific zoning plan
The required consent threshold has dropped to 66% of residents, making it easier to advance projects

The Situation in Gush Dan: Where Does Each City Stand?

The map of Gush Dan cities divides into three clear categories, and it is important to know where your city stands. The first category includes cities that have already approved a replacement plan – led by Kiryat Ono, considered the 'capital of Pinui-Binui' with 17 active renewal plans. In these cities, TAMA 38 is no longer relevant and the new rules already apply.

The second category includes cities that have submitted a replacement plan but it has not yet been approved – such as Ramat Gan, which is planning 59,000 new apartments as part of its master plan and where TAMA 38 continues to apply until May 2026. The third category includes cities like Tel Aviv and Bnei Brak that decided not to extend TAMA 38 at all, and where building renewal will only be possible after a replacement plan is approved.

Kiryat Ono – Already approved a replacement plan, 17 active renewal plans
Ramat Gan – Submitted a plan, TAMA 38 continues until May 2026, planning 59,000 new apartments
Givatayim – Independently promoting a replacement plan
Tel Aviv and Bnei Brak – Did not extend TAMA 38, waiting for replacement plan approval

Economic Impacts: Betterment Levy, Taxation, and Property Value

One of the most significant changes for property owners is the betterment levy issue. Under TAMA 38, there was a full exemption from betterment levy, which made projects more worthwhile for both developers and property owners. Under replacement plans, a default betterment levy of 25% applies. However, each municipality can choose between three options: a reduced levy of 12.5%, a 25% levy, or allocation of 15% of building areas for public needs.

In terms of property value, data shows that the price gap between apartments in old buildings and new apartments in Gush Dan stands at 15%-30%. Buildings entering an urban renewal project experience a significant increase in value, so property owners in buildings that will not be included in replacement plans may see a growing gap relative to their neighbors. On the other hand, the housing price index showed a cumulative decline of approximately 2.4% from the beginning of 2025, indicating overall market volatility.

Betterment levy increases from 0% (TAMA 38) to 25% (Shaked Alternative) by default
Price gap of 15%-30% between apartments in old versus new buildings in Gush Dan
The housing market showed a moderate decline of approximately 2.4% from early 2025, but urban renewal continues to drive demand

Special Rights for Elderly Residents and Vulnerable Populations

An important point not to miss: even in the post-TAMA 38 era, the special rights of elderly residents are preserved. Property owners aged 70 and above who have lived in the property for at least two years before signing the agreement are considered 'elderly' for rights purposes, and from age 75, rights are further expanded. Elderly residents are entitled to refuse a project if the developer did not offer them the alternatives they deserve, and such refusal is considered reasonable.

The law requires developers to offer alternative housing to elderly residents even in reinforcement projects (TAMA 38/1), not just in demolition and reconstruction projects. This is an important protection ensuring that the elderly population is not harmed by urban renewal processes.

From age 70: Special status as 'elderly' with expanded rights in renewal projects
From age 75: Additional expanded rights, including the possibility of reasonable refusal
The obligation to offer alternative housing to elderly residents applies to reinforcement projects as well, not just demolition

צ׳קליסט

Checklist: 7 Steps for Property Owners in Old Buildings

If you live in a building constructed before 1980 in the Gush Dan area, here are the steps you should take now:

1Check which category your city falls into: Has a replacement plan been approved, submitted and awaiting approval, or not yet submitted? Visit the municipality's website or contact the engineering department.
2Find out if your building is included in the urban renewal complexes defined in your city's replacement plan. Not every old building is automatically included.
3Consult with a lawyer specializing in urban renewal to understand your rights and tax implications – especially regarding betterment levy and capital gains tax.
4If there is a project in planning stages – attend resident meetings and sessions with the social advisor. Active participation ensures your interests are protected.
5Check the consent status in your building: Under the Shaked Alternative, only 66% of residents need to agree, compared to the previous 80%.
6If you are over 70, make sure you are aware of your special rights, including the right to alternative housing and reasonable refusal.
7Consider the long-term impact on property value: A building entering a renewal process is expected to see a significant value increase of 15%-30% compared to old buildings that remain as they are.

שאלות נפוצות

שאלות ותשובות

It depends on the city where you live. In 9 cities like Kiryat Ono, a replacement plan has already been approved and TAMA 38 is no longer relevant. In 15 additional cities like Ramat Gan, TAMA 38 continues to apply until May 2026 or until the replacement plan is approved. In cities like Tel Aviv and Bnei Brak, TAMA 38 no longer applies at all.

Projects that have already received local committee approval will continue as planned. Projects that have not yet received approval will need to adapt to the municipal replacement plan. In cities that extended TAMA 38 until May 2026, there is still a narrow time window. In cities that did not extend, projects will need to transition to the new track.

Unlike the full exemption that existed under TAMA 38, the Shaked Alternative includes a default 25% betterment levy. However, each municipality can decide on a reduced rate of 12.5%, or allocate 15% of areas for public needs instead. In practice, this cost usually falls on the developer rather than the residents, but it may affect the project's viability and the compensation you receive.

There is no one-size-fits-all answer. On one hand, a renewal project can increase property value by 15%-30%. On the other hand, such projects take 5-8 years, and there is no guarantee that your building will be included in replacement plans. It is recommended to consult with a property appraiser and a local real estate agent familiar with the local market before making a decision.

No. The rights of elderly residents are preserved even in the post-TAMA 38 era. Residents aged 70 and above are entitled to special status, and from age 75, rights are further expanded – including the right to alternative housing and the right to reasonable refusal if the developer did not offer suitable alternatives.

The end of the TAMA 38 era is not the end of urban renewal – it is the beginning of a new era. The Shaked Alternative and municipal replacement plans offer a more tailored and modern framework, but also a more complex one. Property owners in Gush Dan must be proactive: check their city's status, understand their rights, and consult with professionals.

If you are a property owner in an old building in the Kiryat Ono, Ramat Gan, Givatayim area or surroundings and want to understand what this means for you – contact Shmuel from 'HaNekhas BeGova HaEinayim' (The Property at Eye Level). With extensive experience in the local real estate market and deep understanding of urban renewal processes, Shmuel can help you navigate the new reality and make the right decisions for you and your property.

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