Extending an apartment

Thinking of adding rooms and extending your apartment, detached house or penthouse? Thinking of building your dream home on a plot you have bought? Attorney Uri Shiloh, a real-estate specialist and partner at E. Shiloh & Co., explains when an exemption from betterment levy is available for apartments of 140 square meters.
Under the latest amendment to the Planning and Building Law, an exemption from betterment levy may be obtained for the first 140 square meters of an apartment. This exemption is subject to several qualifications, the most important of which are:

• The exemption is granted only to an actual occupier who owns or holds a long-term lease of a plot or an existing apartment; it is not granted, for example, to a tenant.
• The exemption is also conditional on the apartment actually being used by its owner or the owner’s relative, who must live in it for at least four years after construction or extension is completed. If the apartment is rented out or sold during that period, the betterment-levy liability will remain in force.

It was recently held that the exemption may be granted for several apartments on the same plot, but for no more than one apartment per occupier or the occupier’s relative. Accordingly, there is no point in trying to register several apartments in the names of different relatives of the occupier, since the exemption will be granted for only one apartment.
In addition to this exemption, an exemption for constructing or extending a residential apartment may also be available under other statutory provisions, such as construction of a residential protected room, strengthening a building against earthquakes, or building apartments in an area or neighborhood designated for rehabilitation. However, the Supreme Court held that the exemption formerly available for apartment extensions for people eligible for one of the Housing Ministry’s assistance programs is no longer practical and has become a “dead letter” following changes to the Ministry’s eligibility system.