Combination Deal
A “strategic partnership” between a landowner and a developer—transforming your land into a High-Level premium product while protecting your rights at every stage.
What is a Combination Deal and Why was it Developed?
A Combination Deal is a “strategic partnership” model between a landowner and a developer. Essentially, the landowner sells a portion of the land’s rights to the developer, and in return, the developer constructs residential units (or commercial spaces) for the owner on the remaining portion. This model was developed to allow landowners to upgrade their assets and realize construction potential without investing their own capital, maximizing profits through new, finished properties instead of raw land.
Hemli Group’s Professional Perspective
For us, a combination deal is the ultimate expression of trust. We believe in total integrity (Honesty): this is a complex transaction where the interests of both parties must be perfectly synchronized. We don’t view this as just “construction,” but as comprehensive financial and tax risk management. Our expertise lies in transforming your land into a High-Level premium product while protecting your rights at every stage.
Legal Implications, Taxation, and Process
A Combination Deal is a complex “tax event” requiring precision:
Real Estate Taxation
The deal triggers Capital Gains Tax (Mas Shevach) for the seller and Purchase Tax (Mas Rechisha) for the developer. We often handle “Net Deals,” where the developer covers the seller’s taxes, requiring meticulous tax planning.
Construction Services VAT
Tax authorities view building for the landowner as a service provided, thus VAT applies to the value of those services.
Valuation (Standard 21)
The deal requires an experienced appraiser to determine the “Combination Percentage” (how much of the building the owner receives vs. the developer) in a way that is both economically viable and secure for both parties.
Guarantees & Securities
This is the heart of the deal. We provide autonomous bank guarantees and Sales Law guarantees to ensure the landowner is fully protected if the project is halted.
Registration & Caveats
Registering a caveat for the developer and the financing bank is a critical stage, accompanied by partnership agreements and power of attorney to ensure execution.
Who is it for?
A Combination Deal is the optimal solution for:
Private Landowners or Heirs
Who want to transform land into new apartments without taking out construction loans or managing contractors.
Companies Holding Real Estate Assets
Looking to upgrade their property to a modern, High-Level premium structure.
“Net Deals”
For those seeking total certainty regarding the final compensation (finished apartments) without worrying about taxes or municipal levies.
Those Seeking Maximum Profit
Long-term, the value of finished apartments is significantly higher than the value of the land alone; a combination deal allows the owner to enjoy this appreciation.
Hemli Group’s Operational Approach
As a company with a solid financial backbone and years of experience in elite construction, our operational model for combination deals is built on three pillars:
Financial Strength & Security
We provide the strongest securities in the real estate market. Our ability to secure closed bank financing for complex projects is the landowner’s insurance policy.
Creative & Legal Tax Planning
We work with top-tier tax consultants to maximize the return for the owner and prevent unnecessary payments to authorities.
High-Level Construction Standards
We don’t build “standard contractor apartments.” The landowner’s units are built to the same premium specifications as the developer’s units—with no compromises on finishes, systems, or architecture.
Transparency & Personal Guidance (Honesty)
We understand that a landowner is inviting us into their most valuable asset. Therefore, we manage the process with total transparency, providing regular reports and personal access to the company’s management.
Have Land You Want to Develop?
From strategic partnership to premium finished properties, Hemli Group delivers uncompromising quality at every stage.
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