The ownership of lands in Israel is quite different from many other countries in the world. 93% of the land in Israel is owned or managed by the state, the Jewish National Fund and the Development Authority. The remaining 7% of lands are owned by private individuals or organizations.
The lands owned or maintained by the state, JNF and developmental authority are referred to as Israel lands and they cannot be sold to any party by law. The lands can only be leased out to individuals and organizations.
Despite its small land area, Israel has a significant part of its land and property unclaimed, which means there are no known owners or heirs to that property. They are termed as abandoned property. How to find abandoned land in Israel? Well, the state has a separate department for locating and maintaining abandoned property.
Leasing Of State Owned Property In Israel
The state does not sell its property but rather leases it out by setting a final date for the lease. The state is the lessor in the deal and is paid a prearranged fee. In return, the lessee is granted the lease rights. The lease agreement is signed for a defined period of time and the lease can be extended for another similar period or for some period decided by the state.
Although the lessee does not get the ownership of the land, the state’s ownership of the land reduces by capitalization of the lease.
What Is Meant By Capitalization?
Capitalization is the mathematical formula used to calculate the monthly lease fee for the lease period in terms of immediate payment. It is important to note that capitalization does not grant full ownership of the property to the lessee. 91% of the property value belongs to the lessee and 9% belongs to the state.
Some see this as a measure taken by the state to protect its lands from being sold to foreign nationals.
When the lease period is over, the partial owners lose possession of the land. The land will be reassessed on renewing the lease and if its value has increased, the lessee is required to pay the balance of their purchase rights if they want to renew the lease.
The person who has leased state property enjoys rights similar to what they enjoy in their own property. However, they are never granted the full ownership of the property at any time.