Selling an Apartment Purchased Under TAMA 38 (723)

An apartment sold after a TAMA 38 project may look like a regular property, but legally it has important specifics.
Lack of understanding of TAMA 38 nuances can lead to deal delays, unexpected taxes, or buyer claims.

Let’s review what a seller must check before selling.

What a Post–TAMA 38 Apartment Means Legally

TAMA 38 is a national program to strengthen buildings against earthquakes, which often includes:

• structural reinforcement;
• installation of elevators;
• addition of balconies and parking;
• construction of extra floors;
• increased apartment size.

Important:
Part of the apartment is considered “old” and part “new” — and this directly affects taxation and sale conditions.

Checking Registration in Tabu (נסח טאבו)

Before selling, it is critical to confirm that:

• all TAMA 38 changes are fully registered in Tabu;
• the apartment size is correctly updated;
• added elements are recorded:
  • balcony
  • parking
  • storage room (if applicable);
• no temporary or conditional notes remain.

Incomplete registration can delay or block the transaction.

Capital Gains Tax (מס שבח): The Key Issue

Why TAMA 38 Creates Tax Complications

• The “old” portion of the apartment may qualify for tax exemption.
• The “new” portion (balcony, extensions, added area) may be taxable.

The tax authority examines:

• the date rights to the improvements were received;
• the value of the added area;
• the holding period.

Without a professional calculation, sellers may:

• overpay tax;
• receive a tax reassessment after the sale.

Documents That Are Closely Examined

• TAMA 38 agreement with the developer/contractor;
• building permit (היתר בנייה);
• final completion certificate;
• updated Tabu extract;
• documentation of apartment size before and after the project.

Buyers and their lawyers will review every detail.

How TAMA 38 Affects Pricing and Negotiations

Advantages:

• elevator
• balcony
• renovated building
• higher market liquidity

Buyer concerns:

• incomplete registration
• tax exposure
• legality of additions

Proper preparation reduces objections and speeds up the sale.

Common Seller Mistakes

• selling before Tabu registration is completed;
• failing to declare the “new” portion for tax calculation;
• assuming the entire apartment is tax-exempt;
• not attaching the TAMA 38 agreement to the transaction.

Tips from Unehasim

• Verify registration of all changes before listing the property.
• Order a preliminary capital gains tax assessment.
• Prepare the full TAMA 38 documentation package.
• Explain the legal status to buyers upfront — this reduces price negotiations.

Contact Unehasim Specialists

If you are selling a post–TAMA 38 apartment in Haifa, Unehasim can help:

• review Tabu registration and legal status;
• assess tax implications;
• prepare the property for sale with minimal legal risk;
• coordinate the transaction together with a lawyer until funds are received.

A properly structured TAMA 38 sale is faster, safer, and more profitable.