Tel Aviv Approves Central District Renewal Plan to Boost Municipal Revenues
Tel Aviv's new urban renewal plan for Quarters 5 and 6 will generate billions in betterment levies. Apartment owners face significant tax liabilities upon property sales under the Shaked Alternative framework.
A new urban renewal master plan for Quarters 5 and 6 in central Tel Aviv is set to inject billions of shekels into the municipal treasury through betterment levies (heytel hashbacha). The municipality has adapted its strategy following previous shortcomings in northern districts, ensuring the new framework will aggressively capture potential revenues from property transactions.
Scope and Objectives
Spanning 1,686 dunams, the plan covers the historic core of Tel Aviv, bordered by Bograshov Street, HaRakevet Street, Allenby Street, Yehuda Halevi Street, the Mediterranean coastline, and the southern approaches toward Jaffa. Similar to the regulatory frameworks applied in Quarters 3 and 4, this blueprint governs individual building renewals rather than large-scale clearance projects, aligning with the Shaked Alternative that succeeded TMA 38.
While historic structures, preservation sites, and the UNESCO-listed White City zone are largely exempt, the plan permits building additions or demolition and reconstruction, with allowable heights ranging from 5.5 to 7.5 floors. It aims to add roughly 14,000 housing units to the existing inventory of 21,600 apartments.
Financial Impact on Property Owners
According to real estate experts, the financial implications for apartment owners are substantial. Unlike previous northern district plans shielded by TMA 38 limitations, Quarters 5 and 6 operate under the Shaked Alternative, which offers only partial regulatory protection.
Appraiser Danny Tereshinsky noted that property owners selling apartments within the designated zone will face significant tax liabilities:
"Anyone selling apartments in these quarters is expected to pay hundreds of thousands of shekels upon completing the sale."
Levies will reach 50% of the value increase upon property sale and 25% upon securing building permits for execution. Furthermore, the plan introduces regulatory flexibility, permitting home offices for resident-owners, ground-floor commerce, and mixed-use zoning along major thoroughfares such as Allenby, Ben Yehuda, and Menachem Begin, while mandating public space allocations on plots exceeding 700 square meters.
