Who is eligible for discounted housing?

With continuously rising home prices over the past 15 years, the government introduced a series of programs for discounted housing on state land to first-time home buyers who meet the eligibility criteria. Despite the changing names of the promotions – “discounted apartment“, “occupant price”, “target price” and more, they are all ultimately based on the same principle, according to which the state markets land designated for residential construction to developers in a special tender, which requires them to offer a portion of the apartments built at prices significantly lower than the market price to eligible buyers.

The criteria to participate

The required criteria to participate in these discounted housing promotions are Israeli citizens living in Israel, who do not and have not owned an apartment, or part of an apartment (more than a third) in the past 3 years, and who do not hold rights in real estate in indirect ways, such as membership in a purchasing group or on a kibbutz. Participants must be married or common-law couples, single parents of at least one child under the age of 21, or individuals aged 35 and over. Those who meet these criteria can issue a certificate of eligibility online, or offline through one of the 3 companies that perform this service for the Ministry of Construction and Housing.

How the lottery system works

The allocation of discounted apartments is through lotteries, which eligible participants can enter after receiving their certificate of eligibility. In recent years, every few months, the Ministry of Housing announces the opening of a lottery, in which several thousand discounted apartments are drawn at once in a large number of cities. According to the lottery rules, every eligible participant is entitled to register for lotteries in 3 cities of his choice, while in his city of residence, his chances are higher due to being a “local person”. The chances of winning the lottery may be low in more desirable cities located in the center of the country, and naturally higher in cities in the periphery – in the north and south of the country.

The lucky winners

The winners receive an invitation to a “buyers’ conference” by the contractor, which takes place close to the date of issuance of the building permit. This waiting period may be quite long in some cases, up to about two years in extreme cases. At the conference, they become acquainted with the types of apartments in the discounted housing project, and then the process of selecting apartments begins and signing the contracts. The entire process, including the specifications of the apartments, and the contracts offered to the winners is closely supervised by the Ministry of Housing. After occupancy of the apartment, there is a restriction on the buyers according to which they cannot sell it for 5 years. However, there is no obligation to live in the apartment during this period, and it may be rented.

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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