Investing in agricultural land offers many advantages — but it’s just as important to understand the risks so you can avoid them in advance.

Buying agricultural land is a profitable investment channel that many Israelis turn to. Near-zero interest rates, alongside high housing prices and strict financing and taxation regulations, make agricultural land — which is not yet approved for construction — an increasingly attractive option. Such transactions offer significant profit potential, but they also involve risks that every investor should be aware of. Just as important is understanding the various ways to ensure you are not taking unnecessary risks and that you are choosing agricultural plots in the right, most worthwhile deal.

What are the opportunities in buying agricultural land?

A solid investment

Compared with the capital market — which can experience extreme fluctuations and heavy losses during crises — land is considered a stable investment. Given Israel’s extremely high housing prices, and the possibility they may even decline, agricultural land looks even more realistic and solid.

High profit potential

Because the value of land typically rises sharply after rezoning approval, and even more once construction begins, the potential profit is significantly higher than buying a ready-built property.

A tangible asset

Privately owned land registered in the Land Registry (Tabu) is a concrete, real, well-defined asset. It has an exact location and, unlike certain rights, securities, or options, land cannot disappear. Ownership is not affected by natural disasters, economic crises (which may even increase land value), or security situations.

A good location leads to major appreciation

Agricultural land purchased in a good location — near an existing community and free of obstacles that could prevent future rezoning — will eventually become part of a growing town. This process typically increases its value by hundreds of percent. The shrinking supply of land reserves for construction in Israel further boosts the value of well-located agricultural plots.

Value increases over time

Even if it takes decades for the land to be rezoned, its value is likely to rise regardless. If the owner wishes to sell it over the years, it will likely be possible to do so at a profit — even before building approval is granted. Even if real-estate prices drop, the loss applies only to future potential returns, not to the original price paid. In contrast, with built properties, price drops can lower the property value itself, even below the purchase price.

Emotional satisfaction

Since ancient times, private land ownership has given people a sense of stability and peace of mind, as well as the security of having an asset to pass on to future generations. Many also view buying agricultural land as an act of personal connection to the land — and even a patriotic gesture.

What are the risks in buying agricultural land?

Buying from an unreliable seller or from someone who is not the actual owner

Due to the rising demand for agricultural land, many sellers — some unprofessional — are offering land for sale. Some sell plots but do nothing to advance rezoning. Others fail to consult key experts such as lawyers, architects, and appraisers. In the worst cases, it may be a scam in which the seller is not the owner at all. This is why it’s critical to check the identity, experience, and professionalism of the seller.

Land that will never be rezoned

The land’s location is crucial for rezoning potential. Land far from an existing community — or near a community that is not planned for expansion or that has reached its population limit — has very low rezoning chances. Land located in areas designated for roads, rail lines, archaeological sites, military zones, forests, and similar uses has virtually no rezoning potential.

Overpaying

Agricultural land is appealing because of its low price relative to its potential future value. If the land is sold at an inflated price compared to its realistic potential, the entire benefit of the transaction disappears. Future taxes imposed on the owner must also be considered. These factors can be reviewed in an appraiser’s report based on Standard 22 (if the seller is professional enough to provide one).

Buying land that belongs to the Israel Land Authority

The first rule of buying agricultural land is to purchase only privately owned land registered in the Tabu under the owner’s name. There is no logic in purchasing agricultural land owned by the Israel Land Authority (formerly “the Administration”), because after rezoning, the Authority — not the buyer — reaps the gains.

All of these risks can be avoided with proper due diligence and the right professional guidance.

Shefa Nehasim Group

Shefa Nehasim Group offers opportunities to invest in income-generating agricultural lands that are privately owned and fully registered in the Tabu. These plots are located in attractive areas, adjacent to strong and in-demand communities. The group offers, among others, land near Kibbutz Naan in the lowlands and land near Kfar Tavor in the Galilee. The group has 20 years of experience in this field and is supported by a skilled team of lawyers, architects, and appraisers.