Updated: November 2026 · e-land editorial team
Disclaimer: The information in this article is general, correct as of the update date, and does not constitute legal, appraisal or investment advice, nor a recommendation to purchase any specific land. e-land publishes listings of land for investment on the website.
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Every new neighborhood you know, every business park and every shopping center stands on land that was once a field. This is how Israeli cities grow: plans designate agricultural areas for development, and the land changes its designation. Those who held such land before the change may enjoy a significant increase in value.
But not every field will become a neighborhood. The difference between land with potential and land that will remain agricultural for decades depends on several conditions that can be checked in advance. This guide explains what they are, what reduces the profit along the way, and how the law protects you as a buyer.
What is agricultural land, and what is "rezoning"?
Agricultural land is land whose planning designation is agriculture. Building homes or businesses on it is prohibited, and use contrary to the designation is an offense under the Planning and Building Law.
Rezoning (in Hebrew, hafshara) is a change of the land's designation, for example to residential or employment use, through a plan approved by the planning authorities. The process usually passes through several layers of planning: a national master plan, a district master plan, a local (comprehensive) master plan, and finally a detailed plan, which alone allows a building permit. The process usually takes years, sometimes more than a decade.
Why do investors choose agricultural land?
- A relatively low entry price: agricultural land costs only a fraction of the price of land already approved for construction, so it can be accessed with relatively modest initial capital.
- Potential for appreciation: if the land is rezoned for construction, its value may rise significantly. This depends on the rezoning, which is not guaranteed.
- An asset registered in your name: in private land, your share is registered in the Land Registry (Tabu) and is a full asset that can be sold or inherited.
- Low ongoing costs: no tenants, repairs or building management fees. The main costs arise at the planning and realization stage.
- Private land is a limited resource: only about 7% of the land in Israel is privately owned, and private land in high-demand areas is a sought-after asset.
- A long-term asset: many families hold land as long-term savings for the next generation.
Six signs of land with rezoning potential
There is no way to know for certain whether and when land will be rezoned. But some conditions significantly improve the chances, and others push them away. These are the signs to look for:
1. Urban fabric in TAMA 35
TAMA 35, the Integrated National Master Plan, divides the country into "fabrics" (mirkamim). The urban fabric is intended to absorb most future development, while the conservation-oriented fabrics (integrated conservation and coastal) limit development. Land in the urban fabric is considered to have a higher chance of rezoning than other fabrics (source). Note: the fabric sets a framework, not a designation. Even within the urban fabric, the actual designation is determined by district and local plans.
2. Adjacent to existing development
Planning authorities prefer to expand communities contiguously, next to existing neighborhoods and existing infrastructure: roads, water, sewage and electricity. Land bordering a built neighborhood is in a better position than isolated land, whose development requires bringing infrastructure from scratch.
3. Marked in a district or comprehensive plan
The strongest sign is when the land is already marked in a district master plan or in the local authority's comprehensive plan as an area for future development, for example for housing or employment. The further the land advances through the planning layers, the lower the risk, and usually the higher the price.
4. Demand and a local authority that wants to grow
A community with high housing demand, whose land reserves are shrinking, and a local authority promoting expansion, are a good background for rezoning. On the other hand, TAMA 35 sets population targets for communities, and a community approaching its target may find it harder to expand.
5. Private ownership registered in the Land Registry
Most of the land in Israel, about 93%, is publicly owned (the State, the Jewish National Fund and the Development Authority) and managed by the Israel Land Authority (source). In ILA agricultural land leased for cultivation, the State is generally entitled to reclaim the land when its designation changes, in exchange for compensation under arrangements it has set (Nadlan Center, Calcalist). Therefore, anyone seeking to benefit from the increase in value needs privately owned land registered in the Land Registry.
6. Outside protected areas and restrictions
Land designated as forest, nature reserve, ecological corridor or protected open space, or subject to restrictions such as airport noise, main power lines or national infrastructure, may remain agricultural forever. Land declared agricultural land by the Committee for the Preservation of Agricultural Land and Open Areas (VALKHASHAP) is also considered higher risk (source).
What reduces the profit along the way?
Many investors calculate only the gap between the purchase price and the sale price. In practice, these costs must also be taken into account:
- Expropriations for public needs: when a plan is approved, part of the area is allocated to roads, parks and public institutions. Under the Planning and Building Law, up to 40% of a plot may be expropriated for public needs without compensation (source). In reparcellation plans the allocation for public needs may be higher, and the excess above 40% may be subject to compensation (source).
- Purchase tax: on property that is not a residential apartment, the rate is 6% of the price, payable on purchase (source).
- Betterment levy: 50% of the increase in value created by the plan, payable on realization (source; see our guide to the betterment levy). In rezoned land, this may be the largest single amount.
- Capital gains tax (Mas Shevach): 25% of the real gain on sale (source; see our guide to capital gains tax).
- Time and expenses: planning and development costs, fees for lawyers and appraisers, and money that is not working in another investment for years.
The law protects you: ask for the Standard 22 appraisal
Since 2016, consumer protection regulations require anyone marketing land that is not available for construction to the public to state this clearly in advertising. In addition, at least 7 days before signing, they must give you, in writing and free of charge, a real estate appraisal under Standard 22 of the Real Estate Appraisers Council, together with a summary (source). The summary includes:
- An assessment of the likelihood that the rezoning plan will materialize
- The land's current designation and its current value
- The expected time until rezoning
- The total expected expenses, levies and taxes, and your share of them
This is the most important tool you have. A serious marketer will provide the appraisal without you having to ask. If you have not received it, do not sign.
Checklist: what to check before buying
- An up-to-date Land Registry extract: who the owners are, whether the land is private or ILA land, and whether any liens or notes are registered.
- Documented planning status: the TAMA 35 fabric, the designation in the district plan and in the comprehensive plan, and which plans are in preparation. This can be checked in the Planning Administration's online system and at the local planning committee.
- Standard 22 appraisal: receive it at least 7 days before signing. It is also worth consulting an appraiser of your own.
- Price: compare with similar transactions in the area, and check that the price matches the Standard 22 appraisal and the actual planning status.
- Survey: a survey plan of the plot prepared by a licensed surveyor, showing the actual boundaries and area.
- The marketer and their track record: especially when a marketing company sells shares to the general public.
- Caution note and trust account: the money does not pass to the seller before a caution note is registered in your favor.
- Co-ownership agreement: if the land is jointly owned (undivided shares, musha), review the agreement with your own lawyer.
- Investment horizon: invest only an amount you can hold for many years, even in a scenario where rezoning is delayed.
The bottom line
Agricultural land is one way to enter real estate at an early stage, before planning is translated into price. The secret is not "buying land", but choosing the right land in the right place: urban fabric, adjacency to existing development, designation in plans, real demand and private ownership. Professional due diligence, a Standard 22 appraisal and your own lawyer are what turn an opportunity into a calculated investment.
Listings of land for investment are published on e-land. For any land that interests you, ask the marketer for the Standard 22 appraisal and the planning documents, and review them before any commitment.
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Not sure about a term? See our real estate glossary.
Disclaimer: The information in this article is general, correct as of the update date, and does not constitute legal, appraisal or investment advice, nor a recommendation to purchase any specific land. It contains no promise of rezoning or returns. Before any transaction, consult a lawyer, a real estate appraiser and a tax advisor. e-land publishes listings of land for investment on the website. This English version is provided for convenience; in case of any discrepancy, the Hebrew version prevails.
Sources
- Consumer Protection Regulations (Duty to Disclose Details in the Sale of Land Not Available for Construction), 5777-2016: overview (Hebrew)
- Nadlan Center, "Agricultural land – the complete guide for 2026" (May 2026, Hebrew): link
- Nadlan Center, "TAMA 35 – the complete guide" (plan fabrics and contiguous development, Hebrew): link
- TAMA 35, Integrated National Master Plan for Construction, Development and Conservation (Wikisource, Hebrew): link
- Globes, on expropriation beyond 40% in reparcellation plans (Hebrew): link
- Calcalist, on the return of agricultural land to the ILA following rezoning (Hebrew): link
- Nadlan Center, "Purchase tax – the complete guide for 2026" (6% on land, Hebrew): link
- Nadlan Center, "Betterment levy – the complete guide for 2026" (50%, Hebrew): link
- Nadlan Center, "Capital gains tax – the complete guide for 2026" (25%, Hebrew): link
- Nadlan Center, on ILA return agreements for agricultural land (2021, Hebrew): link
- ynet, "Land rezoning – the fast track to wealth?" (on expropriation rates, Hebrew): link
- Israel Land Authority, Wikipedia (about 93% of land in public ownership): link
- Planning and Building Law, 5725-1965 (section 190, expropriation; Third Schedule, betterment levy); Real Estate Taxation (Capital Gains and Purchase) Law, 5723-1963; Land Law, 5729-1969 (section 126, caution note)
