Ido Shacham - Real Estate Tax Solutions

Several programs assist residents, apartment owners, and developers to improve properties and turn a profit.

• TAMA 38: An urban renewal project and construction program designed to improve older buildings by strengthening them against earthquakes, adding elevators, parking spaces, and shelter rooms. Developers perform these improvements with the agreement that they may add an additional floor or floors to the top of the building and sell those units for profit. The residents do not pay for these improvements, as they’re funded by private loans on behalf of the developer. In general, developers turn substantial profits from performing a TAMA 38.
• Pinui Binui: An urban renewal project that involves the demolition of older, rundown buildings for the purpose of building modernized, improved structures in their place. Current residents are temporarily re-housed within their current neighborhood while construction takes place. Additional constructed space is included with the project to increase the number of units, add parking spaces, and create shelter rooms. Developers are incentivized to offer these programs, as they profit from selling the additional units.
• Combination Deals: An urban renewal agreement, also known as a partial sale transaction, where a land owner sells a portion of the land rights to a developer. The developer builds on the land and, as part of the agreement, the land owner will own a certain percentage of the building’s units. The cost of construction is equal throughout Israel, so the percentage agreements for the combination deal are determined primarily by the land’s desirability. Land in the center of the country may yield a percentage approximating 50%, while land in the peripheral areas of the country may yield 15%. The final percentage distribution is determined in negotiations between all parties of the development deal – the land value, construction costs, contractor fees, and unit values will all be weighed to reach a final decision.

We specialize in a variety of local and international tax areas, including:

• Providing tax advice and representation
• Navigating and utilizing tax shelters
• Foreign income taxes
• International real estate investment for families and businesses
• Trusts
• New immigrant and returning resident benefits, determining residency status for Israeli taxes, relocations, procedures for voluntary disclosure of international income and real estate, foreign resident investment structure or Israeli-based investments, and other tax situations.

We also have extensive experience in performing tax assessments, negotiating beneficial tax decisions and making tax arrangements with the Tax Authority, in addition to accompanying clients for large transactions and preparing investment opinions.

Watch my video on how to secure a lower tax rate in combination real estate transactions and Tama 38.