# Buying off-plan in Israel: Sales Law guarantee and more > The Sales Law guarantee and its alternatives, the voucher book, the 40% index-linkage cap since 2022, late-delivery compensation and a contract checklist. Canonical: https://shavnu.com/guides/off-plan-protection --- ## The short answer When you buy an apartment off-plan (דירה על הנייר, dira al ha-neyar) in Israel, the developer may not take more than 7 percent of the price from you unless it has secured your money in one of five ways set by the Sale (Apartments) (Assurance of Investments of Purchasers of Apartments) Law 1974. In practice that almost always means a bank guarantee issued for each payment you make through a voucher book. Two further protections come from the Sale (Apartments) Law 1973, as amended in 2022. For contracts signed from 7 July 2022, no more than 40 percent of the price can be linked to an index, and a late delivery earns you fixed monthly compensation without proof of loss. A contract can improve on these rules for the buyer but cannot take them away. This page is general information, not legal advice. Your own lawyer checks how these protections are written into the contract you are offered. ## The five securities, and what each one covers Section 2 of the 1974 law lists five ways a seller can secure payments above 7 percent. A bank guarantee (ערבות בנקאית, arvut bankait) or an insurance policy must secure the return of everything you paid if the seller cannot transfer the apartment to you because of an attachment, a stay of proceedings, a liquidation or receivership order, or circumstances that make delivery absolutely impossible. Cancelling the contract is not by itself such an event, so a guarantee does not pay out because you changed your mind or used an exit clause. Since the 2022 amendment the guarantee and the insurance policy do not cover the VAT part of your payments. If the security is called, a fund held by the Accountant General at the Finance Ministry repays the VAT through the bank or the insurer. ## The accompanying bank and the voucher book Large new projects are usually financed under bank accompaniment (ליווי בנקאי, livui banka'i): the bank finances construction and controls a project account into which buyers' money goes. Section 3B of the 1974 law requires the accompanying bank to issue a voucher book (פנקס שוברים, pinkas shovarim) for each apartment. You pay only through those vouchers, and each voucher payment is an irrevocable instruction to the bank to give you a guarantee or policy, which it must do within 14 business days. Two rules follow. Do not pay the developer by transfer to any other account, by cheque or in cash, even for an upgrade, until your lawyer confirms how that payment is secured. And if you take a mortgage, section 3C requires the lending bank to tell you in writing about these protections and to make sure the security is in place before it releases each draw. In Sde Dov, published examples of this financing include about ₪700M from Discount and Hapoalim for Luzon Ronson's lot 2227 (June 2025). Ask which bank accompanies your project and get its name on the contract. ## Index linkage after the 2022 change Until July 2022 contracts commonly linked the whole unpaid price to the construction inputs index (מדד תשומות הבנייה, madad tsumot ha-bniya). Amendment 9 to the Sale (Apartments) Law changed that for contracts signed from 7 July 2022, and it is still the rule in September 2026. The index allowed is the construction inputs index for residential building published by the Central Bureau of Statistics. On a ₪6.8M contract at most ₪2.72M can be linked, so every 1 percent rise in the index adds at most ₪27,200. Under the old practice, the whole ₪5.44M left after a 20 percent down payment could have been linked, twice as much. ## The payment schedule The law does not fix a schedule; the contract does, within the 7 percent rule and the security requirement. Schedules at Sde Dov range from staged payments tied to the building permit and construction milestones to campaigns that defer most of the price to delivery. Calcalist reported in December 2025 that FIRST offered two tracks in one contract: the full list price with easier terms, or a lower price for accelerated payments, with ₪50,000 at the purchase request, 7 percent at contract, a top-up to 35 percent when the building permit is issued, 12.5 percent two years later, 12.5 percent two years after that and the balance six months before Tofes 4 (occupancy approval). Deferral has a cost that is not always visible. Bizportal reported in June 2026 that developers' financing offers in the district are worth a hidden 6 to 8 percent off the listed price. Since March 2025 the Bank of Israel has limited bullet and balloon loans on which the developer pays the interest to 10 percent of each bank's quarterly mortgage lending, under a temporary order in force until 31 December 2026. Purchase tax is paid on the price in the contract whichever track you choose. ## Late delivery: the compensation formula For contracts signed from 7 July 2022, if the developer delivers more than a month late you are owed compensation without having to prove any loss. It is based on the rent of an apartment similar in size and location and is paid at the end of each month. The developer owes nothing only if you caused the delay or the contract was frustrated by extreme circumstances that could not have been foreseen, and the contract may not reduce the amounts. The wartime law that let parties postpone contractual obligations covered obligations falling due between 7 October and 31 December 2023. As a worked example, for every ₪10,000 of monthly rent on a similar apartment, a twelve-month delay is worth ₪135,000: nothing for the first month, ₪30,000 for months two to four, ₪75,000 for months five to ten and ₪30,000 for months eleven and twelve. Linkage also stops at the contractual delivery date, so a late developer cannot keep indexing your unpaid balance. ## What to check in a Sde Dov contract Sde Dov adds three risks to the usual list: plot-level PFAS findings, delivery dates from 2029 onward in a district where works have already been halted once, and, on private Big Bloc land, an allocation among owners that the court has frozen. The checklist puts those next to the general points. For the contamination questions in full, see the contamination guide. ## Where each of these comes from Sale (Apartments) (Assurance of Investments) Law 1974 on Nevo: section 2 (7 percent and the five securities), section 3B (accompanying bank, voucher book, 14 business days), section 3C (lending bank), section 3C1 (VAT): https://www.nevo.co.il/law_html/law00/70330.htm (checked 28 September 2026) H. Noam law office, summary of section 2: what a guarantee covers, the insurer's approval, the VAT fund since 2022: https://noamadv.co.il/aravut-hok-hamecher-perek-2 (checked 28 September 2026) Ministry of Construction and Housing, Amendment 9: linkage limits and delay compensation: https://www.gov.il/he/pages/9th-amendment (5 July 2022) Knesset, Sale (Apartments) Law (Amendment 9) 2022: summary of the enacted law: https://main.knesset.gov.il/Activity/Legislation/Laws/pages/lawbill.aspx?t=lawsuggestionssearch&lawitemid=2193012 (2022) Sale (Apartments) Law 1973 on Nevo: sections 5A, 5C and 6B: https://www.nevo.co.il/law_html/law00/72490.htm (checked 28 September 2026) Sale (Apartments) Law 1973 on Wikisource: section 5C(d), definition of the construction inputs index: https://he.wikisource.org/wiki/%D7%97%D7%95%D7%A7_%D7%94%D7%9E%D7%9B%D7%A8_(%D7%93%D7%99%D7%A8%D7%95%D7%AA) (checked 28 September 2026) Rashut HaRabim journal, wartime postponement law covering obligations due 7 October to 31 December 2023: https://journal.lawforum.org.il/sapir-reuveni (26 November 2024) Sale (Apartments) (Limit on Legal Expenses) Regulations on Nevo: ₪5,915 or 0.5 percent, not above ₪4,642,750: https://www.nevo.co.il/law_html/law00/135722.htm (version current at 1 February 2026) Ynet (Calcalist), FIRST's two payment tracks and the accelerated schedule: https://www.ynet.co.il/economy/article/r1auftaq11l (28 December 2025) Bizportal, hidden financing discounts of 6 to 8 percent at Sde Dov: https://www.bizportal.co.il/realestates/news/article/20033505 (6 June 2026) Bank of Israel press release, limits on deferred-payment sales and bullet and balloon loans: https://www.boi.org.il/publications/pressreleases/23-3-25 (23 March 2025) Bank of Israel, Directive 329, version 13: the 10 percent limit in section 8A until 31 December 2026: https://www.boi.org.il/media/hjrlkrse/h2852.pdf (30 June 2026) Nadlan Center, Discount and Hapoalim to lend Luzon Ronson about ₪700M for Sde Dov: https://www.nadlancenter.co.il/article/12329 (24 June 2025) Globes, the nine plots with PFAS indications: https://www.globes.co.il/news/article.aspx?did=1001550365 (23 July 2026) Globes, buyers adding contamination cancellation clauses: https://www.globes.co.il/news/article.aspx?did=1001550723 (28 July 2026) Globes, seven projects marketing and first occupancy expected in 2029: https://www.globes.co.il/news/article.aspx?did=1001554092 (2 September 2026) Mako, Finance Ministry data on cancellations in Tel Aviv under building-permit conditions: https://www.mako.co.il/finances-real-estate/Article-18016c85d4760a1027.htm (3 September 2026) --- Source: https://shavnu.com/guides/off-plan-protection on Shavnu, an independent English guide to the Sde Dov district in Tel Aviv. Figures come from the public record: Israel Tax Authority transaction reports, Tel Aviv GIS, tender results and the Hebrew press.