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How land gains value: the routes to appreciation

In Israel, the real profit in real estate is created during the improvement process - moving land from agricultural to buildable. Here is how that actually happens.

CGR
Connection Group Research
May 20, 2026
  • In recent times, a growing number of people are drawn to real estate investment, with a specific focus on buying plots of land that can be subject to various forms of land-improvement procedures.
  • In Israel it is common to engage in various land-improvement procedures that ultimately lead to a substantial rise in the value of the land. One of the most attractive options for increasing land value is changing the land’s designation from agricultural to building.
  • Investing in real estate and dealing with administrative procedures is a time-consuming process, and not something that can be done quickly. If you are planning a real estate transaction involving a land-improvement process, there are several crucial factors you should be aware of.

What does land improvement mean?

The term land improvement refers to various actions used to change and enhance the physical characteristics of a plot of land. Achieving land improvement involves a series of deliberate actions and processes aimed at raising the value of the land, including steps designed to increase its total monetary value.

The process of raising land value is usually initiated and advanced by the landowner, a developer or another invested party. This progress involves navigating bureaucratic procedures with the appropriate authorities. On its completion, the value of the land increases considerably.

As it happens, once the improvement process is complete, the landowner will hold a valuable asset worth more than the initial purchase cost. In fact, the improvement process is what generates the most substantial profit for the landowner in the field of real estate transactions.

It is important to remember that not every plot of land is ripe for improvement through investment. It is therefore essential to seek advice from experts in the field in order to reduce potential risks and increase the likelihood of a prosperous outcome.

What methods of land improvement are available?

  1. The expansion and increase of building approval on a plot of land is determined by the existing permitted building line on the site (if any), subject to the urban architectural plan that applies to the property. Once the planning process to increase the permitted building percentages is carried out, it leads to a rise in the property’s value and its overall improvement.
  2. A combination deal refers to an agreement between a landowner and a developer or contractor. The landowner relinquishes their rights to part of their land and, in return, receives apartments in the project to be built by the contractor.
  3. In the pursuit of improvement, agricultural land is not exempt from change. To turn it from an agricultural area into residential or commercial land, a series of procedures must be carried out, as defined by the relevant plans. Although the process is long, the reward can be significant, as a profitable outcome is possible.

The main stages of the land-improvement process

  1. In the early stages of the project, the land blueprints are prepared. This involves setting out the new designation regulations in order to obtain building permits. The plans are carefully designed by experts in planning and construction, who take care to address every detail.
  2. The project-improvement process involves a series of crucial stages that must be dealt with. These include committee discussions and the submission of plans to the approving authorities, such as the local planning and building committee and the district committee. Throughout this process, the committees hold discussions on the plans and provide opportunities for objections to be submitted and debated. These critical stages often take a considerable amount of time. To ensure the wheels of the system keep turning, it is advisable to involve a developer or another key figure in the process.
  3. Once the plan is approved, the expropriation procedure can begin. At this stage, the government has the authority to expropriate up to 50% of the released agricultural land in order to create public spaces such as transport routes or public buildings.
  4. As the process nears its hoped-for conclusion, the land will be released and become available for building.

As a result, the value of the land will undergo a significant increase.

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The Connection Group Journal is published for general information and educational purposes only. Nothing here is legal, tax, financial, or investment advice, an offer of securities, or a solicitation. Any land investment carries risk, including planning delays, regulatory change, illiquidity, and potential loss of capital. No return or rezoning outcome is guaranteed. Consult independent legal, tax, and financial advisors before any decision.

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