What’s TAMA 38 and how can it benefit you?

by | Aug 2, 2021 | Israel Real Estate

 Many of the buildings around Israel are old and unsafe, prone to severe damage from earthquakes, and are simply in need of renovation. In Israel, there exists a unique construction program called TAMA 38, a form of urban renewal which is becoming very popular among developers and investors. The idea behind TAMA 38 is a program that benefits everyone, whether you are living in an old building in need of renovation, a developer looking to build new apartments, or an investor seeking an opportunity to buy a new apartment in a project.
 Why is it necessary?

Israel sits on the Jordan Rift Valley, which is an area known for experiencing earthquakes. Furthermore, most buildings in Israel built prior to 1980 are not up to standards required to withstand damages from large earthquakes.


In order to promote public safety and improve the lives of its residents, the Israeli government created TAMA 38, which is an abbreviation of “National Outline Plan.” It allows for developers to easily acquire the necessary permits to strengthen existing structures, while allowing current residents to remain in their apartments throughout construction, and remaining exempt from paying taxes on the improvements.


Residents will benefit from a reinforced structure, and new renovations and amenities added to their own apartments and common areas of their building. Not only that, but the new improvements made to the whole building will increase the value of their apartment, at no cost to them.

What do developers gain from a program like TAMA 38? Why would a developer want to restructure an apartment complex and renovate the existing apartments without getting paid? Through TAMA 38, developers are given permission to add floors to a building in exchange for making improvements. They earn substantial profits by selling out the new real estate they create, which also helps alleviate the urgent need for new housing.
 What’s the catch?

As with any construction in Israel, the process involves many different factors which can become tedious. First, the building in question must be evaluated and approved for reconstruction. Then, a developer must get every tenant in the building to give their permission for the project, while simultaneously acquiring the required certifications. After finding private/bank funding, only then can construction begin.