Types of land in Israel

There are many types of real-estate transactions in Israel. In real-estate transactions that are not a simple apartment purchase but, rather, the purchase of land for residential or other purposes, it is important to understand the history of the land in question when considering the various aspects of the transaction.

Our firm, which has branches in Jerusalem and Tel Aviv, specializes in real-estate and land law. We provide our clients with legal advice and representation in a variety of areas, such as real-estate transaction negotiations, land taxation, rental contracts, registration of land rights, and mortgages.

This article provides a short historic overview of the legal advancements in Israeli land law from the very beginning up until today. The article also details the types of land in Israeli law.

TO WHOM DOES LAND BELONG IN ISRAEL?

During the second half of the 19th century, when the Ottoman Empire still controlled the lands of Israel, the Ottomans initiated a reform plan that required all land owners to register their ownership at a special governmental office dedicated for this purpose.

Toward the end of the century, groups of Jews—especially big organized groups such as the Jewish National Fund (the JNF, headed by the World Zionist Organization, or the WZO)—began purchasing large areas of land for the purpose of developing these lands and settling in them as a step toward creating a future Jewish state.

The JNF owned the most important lands not owned by the British government. To maintain Jewish ownership over these lands, the JNF prohibited selling the lands and preferred a policy of long-term leasing to individuals and corporate bodies.

This policy enabled the JNF to closely control its hold on the lands. In 1948, when the State of Israel was born, the JNF had already owned these lands for over 50 years.

LAND REGISTRATION IN ISRAEL

When the State of Israel was born, it was decided to expropriate all the lands that were held until then by the British government, which led to the JNF and the new Israeli state owning the vast majority of lands within the Israeli borders. Land registration continued to follow the Ottoman rules, since no other registration procedure was created by the new state.

As a result, the question arose as to how to treat these lands, since there were inconsistencies between the Ottoman registration and that of the JNF—that is, there were lands that were registered both as Ottoman and as belonging to the JNF.

Therefore, the State of Israel and the JNF signed an agreement to create a new governmental agency that would be in charge of these lands—the Israel Land Authority. The Authority is now responsible for all State lands, 80% of which are owned by the State, 13% by the JNF, and 7% by private owners.

Over the years, it was decided to measure and chart all the lands, and, for this purpose, the Israeli Land Registry (Tabu) was created. The regulation process has lasted for more than 50 years, and, even today, there are lands that are not registered in the land registry or that are still in the process of being registered. As of 2019, 5% of the State lands have not yet been registered or are in the process of being registered.

WHAT TYPES OF LAND ARE THERE IN ISRAEL?

There are several types of land in Israel, and it is important to know what the land type is when you are planning to purchase it for investment or residential purposes.

Residential land: The designation of this land is residential and the land is intended for construction. Note that there are lands that may become residential in the future although, at the time of the purchase, they are designated for other purposes. To change the designation of the land, a special procedure is required via regional and local committees, and this procedure is expensive and complex.
Land designated for offices and commerce: This type of land is designated for the construction of commercial shops, offices, and any place related to business. These lands may not be used for the construction of residential homes unless the designation of the land is changed via the local committee; therefore, their price is different.
Land for industrial and developmental purposes: These lands are designated for the construction of factories and industrial buildings. They are usually located on the outskirts of cities and beyond. In rare cases, industrial land may be changed to residential land by the decision of the planning authorities.
Tourist land: This type of land is designated for hotels and various tourist activities such as guesthouses, hostels, recreation centers, and amusement parks.
Agricultural land: This type of land is the most common in Israel, and it is designated for solely agricultural purposes. Its price is significantly lower than that of other types of land due to the low return on its output.
Land designated for transportation: This type of land is designated for transportation purposes, such as road construction, parking lots, railways, and airports. These lands are usually owned by the State, and their designation cannot be changed.
Open areas: This is the definition of all other types of land in Israel that are not included in any of the above categories. This type includes nature reserves, forests, and any other unbuilt land.