The Ministerial Committee on Legislation approved the Ministry of Construction’s plan to market apartments in the periphery, releasing a 15-month traffic jam. The cost of the program is about NIS 600 million, and it includes grants of NIS 40,000 for buyers of an apartment in the periphery and NIS 60,000 per apartment as a partial subsidy of the cost of developing the land for contractors who will win tenders from the Israel Land Authority in the periphery. In total, the plan will allow the construction of about 6,000 apartments at a reduced price.
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This mechanism, which is intended to encourage the marketing and purchase of apartments in the periphery, was born as part of a price per occupant and is also maintained in the reduced housing plan of the Minister of Construction, Yaakov Litzman. Its budget was frozen in December 2019 amid a dispute between the Ministry of Construction and the Treasury over the structure of the government housing plan, after which a state budget was not approved. In January, the director general of the Ministry of Construction, Yair Pines, and the Ministry of Finance formulated an outline that would allow the approval of the grants budget, and he also passed the approval of the Ministry of Justice, but the political dispute between Blue and White Likud delayed it. Tenders have been closed in the periphery so far, as construction companies have submitted bids that would weigh down that budget.
The grant to buyers in the amount of NIS 40 will be given to those entitled by the Ministry of Construction who will purchase an apartment in the periphery as part of a housing program at a reduced price, and is conditional on them owning the apartment for at least five years. NIS 60,000 per housing unit as a subsidy for development costs for developers will be given at sites where the price of the land without development expenses is less than NIS 50,000 per housing unit; And in sites where the price of the land is higher than NIS 50,000 but lower than NIS 100,000, the subsidy will be NIS 40,000 per apartment. From July 2021 the development subsidy will be gradually reduced in three stages.