The Court Compared Methods for Calculating Betterment Levies in Evacuation-and-Reconstruction Projects

Sale of the Apartment After Approval of the Plans

Noa Lev owned an apartment on the third floor of an old building at 18 Dafna Street, within the “Dafna–Arlozorov” complex. After the approval of Plan תא/3885 and the land consolidation and re-parceling plan תא/5/3885, she signed an evacuation-and-reconstruction agreement under which she would receive an apartment measuring approximately 130 square meters. On February 6, 2020, Lev sold the old apartment for NIS 4,150,000 and was subsequently required to pay a betterment levy.

Why the Valuations Differed

The Local Committee assessed the levy for Plan תא/3885 at NIS 518,090 and for Plan תא/5/3885 at NIS 203,153. The appraiser representing the apartment owner maintained that NIS 84,500 should be collected for the first plan and that the second plan had not created any betterment subject to a levy. The decisive appraiser, Eli Cohen, set the two levies at NIS 247,800 and NIS 243,600, respectively—a total of approximately NIS 491,400, plus linkage differentials.

Three Methods for Valuing the New Situation

The Court requested calculations using three methods: direct comparison with transactions, valuation based on the replacement apartment’s value, and calculation of the discounted proportional value of the rights. In the supplementary appraisal, the decisive appraiser arrived at NIS 229,485 using the direct-comparison method; NIS 353,864 based on the replacement apartment’s value, without accounting for use of the old apartment during the interim period; and NIS 635,000 when accounting for that use. The discounted proportional-value method, without adding compensation for use, produced an amount of NIS 247,800.

The Legal Basis of the Dispute

The Court relied on the principle that a levy is collected only on enrichment resulting from the planning measure: the property’s value before approval of the plan is compared with its value after approval. In this context, the direct-comparison method using transactions was adopted as the preferred valuation method when suitable data are available. The Court also noted that the discount for deferred implementation should apply only to the added value under the plan, not to existing and available rights; in such a calculation, there is no need to separately add the value of using the old property during the interim period.

The Outcome of the Decision in the Text Presented

The Local Committee filed the appeal and demanded that potential rental payments or the value of using the apartment until implementation of the project be taken into account. The Appeals Committee had previously rejected this position by a majority, relying on the Tafchnik case. However, the submitted material ends before the operative portion, and the source therefore does not state the final outcome of the administrative appeal or the amount of the levy ordered by the Court.

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