Off-Plan Linkage Exposure

Written By Adam Kushner

Tel Aviv Property Index · Off-plan

Forty per cent of your off-plan price is not fixed

Buy an apartment before it is built and part of the price you agreed travels with the construction inputs index until the day the developer is contractually due to hand you the keys. The law caps how much. It does not remove it. Here is what the uncapped part costs, in shekels.

40% the most of the price that may be linked
20% payable at signing, and never linked
2.6% added at a 3.7% index over 36 months
₪79,302 on a ₪3,000,000 contract

What the law actually says

Amendment 9 to the Sale (Apartments) Law 5733–1973 came into force on 7 July 2022 and applies to contracts signed from that date. It did three things.

  1. 1

    At least 20% at signing, unlinked

    A fifth of the price falls due when you sign, and that fifth carries no linkage at all. It is the only part of the price you can be certain of on the day you agree it.

  2. 2

    Half of every later payment, at most

    Of each payment after signing, no more than half may be tied to the construction inputs index. Half of the remaining 80% is 40% — the ceiling on your exposure, and the number most contracts run right up to.

  3. 3

    Linkage stops at the contractual delivery date

    Linkage runs to the delivery date in the contract, not the day the building is finished. A developer who runs eight months late carries the index for those eight months. You do not.

Payment timing is set separately, by the Sayag Regulations 5735–1975, which tie what a developer may collect to the construction stage actually reached. Everything below assumes a schedule shaped by those rules.

Where the exposure sits in the schedule

The signing payment is safe. Every payment after it is half exposed, and the exposure grows the further from signing the payment falls — because the index has had longer to move.

Figure 1 — stage payments on a ₪3,000,000 contract, 36-month build

Where a ₪3,000,000 contract sits against the index Share of the price payable at each stage of a 36-month build Not linked Linked to the construction inputs index Signing month 0 ₪600,000 Foundations month 6 ₪300,000 Frame to your floor month 12 ₪450,000 Frame complete month 18 ₪450,000 Plaster and screed month 24 ₪450,000 Finishing month 30 ₪450,000 Delivery month 36 ₪300,000 ₪1,200,000 of this price moves with the index — 40%, the statutory ceiling

Schedule shown is a conventional Sayag-shaped one. Yours will differ; the shape of the argument will not.

What it costs while you wait

The construction inputs index rose 3.7% in the year to June 2026. Carry that rate across a three-year build and the linkage adds ₪79,302 to a ₪3,000,000 apartment — money that is not in the price on the brochure, not in your mortgage approval, and not usually in the buyer’s arithmetic until the second or third payment lands.

Figure 2 — cumulative linkage cost, three index paths

What the linkage costs as the building goes up Cumulative addition to a ₪3,000,000 price, by annual index rate ₪0 ₪37,500 ₪75,000 ₪112,500 ₪150,000 0 6 12 18 24 30 36 months from signing index 6.0% a year ₪130,231 index 3.7% a year ₪79,302 index 2.0% a year ₪42,467 Linkage stops at the contractual delivery date. A developer who runs late carries the index from that day, not the buyer.

Build length is the variable nobody negotiates

Buyers argue about the price and accept the delivery date. The delivery date is doing as much work as the index rate: at 3.7%, stretching a build from three years to five raises the linkage bill by roughly 71%.

Figure 3 — linkage cost by build length and index rate

How long you wait matters as much as the rate Linkage cost as a share of the headline price index 2% a year index 3.7% a year index 6% a year 24 months 0.9% ₪28,113 1.7% ₪52,188 2.8% ₪85,019 36 months 1.4% ₪42,467 2.6% ₪79,302 4.3% ₪130,231 48 months 1.9% ₪57,022 3.6% ₪107,124 5.9% ₪177,359 60 months 2.4% ₪71,783 4.5% ₪135,673 7.5% ₪226,492 A five-year build at 6% costs nearly three times a three-year build at 3.7%.

What the 2022 amendment removed

Before July 2022 the whole balance could be linked. On the same contract, at the same index, that was ₪158,605. The cap halves it. If you are buying from a developer holding an older contract template, or resigning a contract signed before that date, this is the difference.

Figure 4 — the same contract either side of 7 July 2022

What Amendment 9 took off the buyer Same contract, same 3.7% index, same 36-month build Contracts before 7 July 2022 every shekel of the balance linked 5.3% ₪158,605 Contracts from 7 July 2022 half of each payment after signing 2.6% ₪79,302 The cap halves the exposure: −₪79,302 on this contract. It does not remove it. 40% of the price still moves with the index.

Before you sign

Five things to establish in writing

  • The linked share of each payment. Not "the balance is linked" — the percentage, payment by payment. Half is the ceiling, not the default.
  • The base index and its date. Linkage is measured from a stated index reading. A base set months before signing costs you the movement in between.
  • The contractual delivery date. It ends the linkage. A vague date, or one tied to a permit that has not issued, leaves the clock running.
  • Whether the index can fall. Most contracts link upward only. If yours does, say so out loud — it is a one-way bet you are taking.
  • Which s.2 security you get and when. Separate point, same conversation: no more than 7% of the price may be taken on account before one is in place.

Method

Every figure on this page is arithmetic on the statute, not a forecast. The model takes a headline price, a stage payment schedule, a contractual build length and one assumption — the annual change in the construction inputs index — and revalues the linked half of each payment from signing to the date that payment falls due.

The 3.7% used throughout is the published annual change in the index to June 2026. It is an assumption about the future, and the only one here. Figures 2 and 3 show what happens if it is wrong in either direction.

Sources: Sale (Apartments) Law 5733–1973, Amendment 9, in force 7 July 2022; Sale (Apartments) (Assurance of Investments of Purchasers) Law 5735–1974, s.2; Sale (Apartments) (Sayag) Regulations 5735–1975, as amended 16 April 2019; Central Bureau of Statistics, residential construction inputs price index.

This page is general information about how index linkage works and is not legal advice on any particular contract. Figures are modelled on a stated set of assumptions and will not match your contract. No apartment is offered for sale on this page.

Adam Kushner
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