What is TAMA 38?

National Outline Plan 38, known as TAMA 38 in Hebrew, is a program for reinforcing existing buildings against earthquakes. The government initiated the program in 2005 to incentivize apartment owners of older buildings to strengthen their structures through additional building rights and tax benefits.

Most common urban renewal track

The program is currently considered the most common urban renewal track in Israel. According to Government data, in 2021, building permits were issued for 545 Tama 38 projects, in which 13,163 apartments were built and strengthened. TAMA 38 permits usually deal with the renewal of a single apartment building, in contrast to evacuation-reconstruction (pinui-binui) projects that deal with the renewal of entire complexes of a large number of buildings. According to the law, the plan can only be implemented in buildings built before April 1980 – which were not built per the Israeli earthquake standard.

The implementation of TAMA 38 is through a contract between the apartment owners and the developer, who, in return for strengthening the building, renewing its infrastructure, and in most cases, expanding the existing apartments, receives additional building rights and is entitled to build new apartments in the building, and sell them.

TAMA 38 Tracks

There are two tracks for TAMA 38, the first is the “strengthening and reinforcement” track, in which the foundations of an old building are strengthened, without its demolition, and several additional floors and apartments are added to the old structure. In most cases, even the existing apartments are extended, to include a safe room (mamad) and a balcony. The second and more common track is the “demolition and reconstruction” track, in which the old building is completely demolished, and a new building is built in its place. In this case, the existing owners receive a new apartment which is larger and includes a safe room.

The pros and cons

The greatest advantage of the program is that it is relatively simple to implement and bureaucracy-free. It does not require the promotion of a city building plan, a process that can go on for years, rather it is by permit only. Another advantage of TAMA 38 for apartment owners in older buildings is that they are exempt from betterment levies at the stage of issuing a permit, allowing them to significantly enhance the value of their homes, tax-free.

However, not every older building can necessarily undergo TAMA 38, since each local authority is entitled to set an independent policy on the subject and determine in which areas the program may be advanced, and in which areas it prefers to carry out renewal through pinui-binui. Furthermore, TAMA 38 is not always economically feasible, especially in peripheral areas where the proceeds from the sale of new units are significantly less than they would be in higher-demand areas.

In the coming years, TAMA 38 is expected to be replaced by other building renewal programs promoted by the various local authorities. The concept of these programs will be similar to TAMA 38 allowing renewal at the individual building level. However, unlike TAMA 38, which is an outline plan that applies to the entire country, the authorities will be able to determine where this form of renewal may be implemented, and with what building rights, thus leading to more appropriate planning.

This guide is intended to provide the reader with general information and not to serve as legal or other professional advice. Readers are advised to obtain advice from qualified professionals before entering into any real estate transaction.

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