It is a well known fact that the majority of the land in Israel is owned by the government. Whole cities, such as Beit Shemesh and Modiin and large parts of other cities as well, are all owned by the government. These lands are administered by a government agency called the Israeli Land Authority. The purchasers of apartments on these lands are granted a 49 year long term lease. The reasons for this are historical and it is important to understand these reasons as it gives a new perspective to purchasing property in Israel.
Until the late 19th century most of the land in Israel was unpopulated. The author, Mark Twain describes this clearly when he writes of his travels in the Holy Land at this time. During the second half of the nineteenth century, Jews began to make aliya to the Holy Land, driven both by changes taking place in their countries of origin and by ideological beliefs. It was at this time that the modern Zionist movement began to emerge.
In 1901, at the fifth Zionist Congress in Basel, the Jewish National Fund (Keren Kayemet L’Yisrael) was established. The goal of this organization was to purchase lands in Eretz Yisrael and develop them for Jewish settlement. The funding for this organization was to come from donations from Jews all over the world. The idea for this had been proposed by Professor Herman Shapiro at the first Zionist Congress in 1897. The concept of public ownership of land came to him from the Torah. It was decided that lands purchased by the JNF would always belong to the Jewish people and would only be rented out for long periods of time but never sold.
The activities of the JNF from the date of its inception and till today can be divided into two stages. During the first stage, from 1901 until the establishment of the State of Israel in 1948, the JNF acted autonomously, working in conjunction with the Jewish settlers in Eretz Yisrael who did not have sovereignty. During this period the JNF purchased large tracts of land in Eretz Yisrael. At the same time many private individuals purchased land, maintaining private ownership of the land. Baron Edmund De Rothschild purchased large tracts of land and established a number of settlements at this time, such as Zichron Ya’akov.
The second stage of activities began with the establishment of the State of Israel and continues today. With the establishment of the State, laws were enacted giving the JNF a special status and its activities and policies were adapted to those of the State.
There are three types of land in Israel. The first is land owned by the JNF. The second is land owned by the State of Israel, received at independence from the Mandate government. The third type is land that was abandoned as a result of the wars between Israel and her Arab neighbors. As a result, the majority of the land in Israel is publicly owned. This land is administered by a government agency called the Israeli Land Authority (Minhal Mekarke’ei Yisrael). The homeowners are granted long term leases for a period of 49 years. At the close of the 49 years the lease is renewed for another 49 years. The Israeli Land Authority usually charges rent for the new period of 49 years, but it is not a significant amount of money.
When an apartment built on this type of land gets registered in the Land Registry (“Lishkat Reshum Mekarkaim” or “Tabu”) then the registered owner of the land is either the Israeli government or JNF or the Israeli Land Authority and the purchaser of the apartment appears as the lessee. In most cases, where the land is owned by the government, the approval of the Israeli Land Authority must be given when registering the rights to an apartment in the name of the purchaser. The Israeli Land Authority gives this approval as long as all the proper paperwork is submitted. With government owned land, when asking for a building permit the approval of the Israeli Land Authority is necessary. This approval is also subject to the proper documents being submitted.
With government owned land, there is no problem mortgaging or selling the long term lease rights, as long as the conditions set out by the mortgage bank are adhered to.
National and regional zoning plans are decided by the municipalities, the Ministry of Housing, the Ministry of Infrastructure and the Israeli Land Authority. Committees headed by representatives of the above offices decide such things as town plans, the allotment of lands, the zoning of lands (agricultural or urban), roads and infrastructure.
Today there is an ongoing debate as to whether these lands should remain government owned or should be made available for private ownership. On the one hand we have the decision that the lands of the JNF are to remain in the perpetual ownership of the Jewish people. Should these lands be privately owned there is a danger of losing the ownership of the lands by the Jewish people. On the other hand, the administration of these lands by the Israeli Land Authority is costly and complex, causing undue annoyance to the public. In the past few years some of the government owned lands have been given over in direct ownership to the lessees. In these cases the lessees have been registered as owners of these lands or properties in the land registry.
The debate goes on…