The construction inputs index: the number in the contract that quietly changes the price
A buyer signs a price. What they actually pay depends on a linkage clause in the contract, and in most cases it is tied to one index — the construction inputs index. The law mentions it in two entirely different places.
Between the price that is signed and the sum that leaves the account stands one clause: linkage. It is written into the contract, it does not stand out, and it produces most of the surprises in off-plan transactions.
Israeli law mentions the construction inputs index in two entirely different contexts, and it is worth keeping them apart.
First context: linkage of the security
The Sale (Apartments) (Assurance of Investments) Law does not stop at requiring that a security be given. It requires the security to preserve the value of the money: the bank guarantee or insurance policy is linked according to the linkage method set in the contract for payment of the price — and where the contract sets no linkage method, the seller must link the guarantee or policy to the construction inputs index.
The construction inputs index is therefore the statutory default. That is a practical fact, because it tells a buyer what they are owed even where the contract is silent.
Note the distinction: the law governs linkage of the security, not linkage of the price. The linkage method for the price itself is a matter for the contract and for negotiation, which makes it the clause worth reading before signing rather than after.
What to check in the contract's linkage clause
- Which index the price is linked to, and from which base index — that is, the index of which month.
- What part of the price is linked: the whole balance, or only part of it.
- From when linkage begins — signing, the first payment, or another date.
- What happens if the index falls — whether there is a symmetrical mechanism.
- What happens on late handover — whether linkage continues past the contractual date. That point bears directly on compensation for late handover.
Second context: the contractor classification
The same index appears somewhere that does not concern a buyer at all, and yet matters to them: the contractor classification regulations. Under regulation 6, the amounts in the classification table change on 1 April and 1 October each year, by the rise in the residential construction inputs index.
The meaning: classification ceilings are real rather than nominal. A contractor qualified to deliver a project of a given size a year ago is qualified, in shekel terms, for a different size today — without having changed anything. More in the article on contractor classification.
The two contexts at a glance
- Linkage of the buyer's security
- Per the contract's linkage method; absent one — the construction inputs index
- Source
- Sale (Apartments) (Assurance of Investments) Law
- Update of the classification table
- 1 April and 1 October each year
- By what
- The rise in the residential construction inputs index
- Source
- Regulation 6 of the contractor classification regulations
Why this explains market behaviour
- A rise in inputs is a floor under prices. Even in a neighbourhood with large supply, no developer sells below input cost for long. That is one explanation for why large supply does not automatically lower prices — discussed in the article on Givat HaKalaniyot.
- A rise in inputs also raises what has already been signed. In a linked contract, an index rise is not a market matter but a bank-account matter. Which makes the linkage clause no less important than the price.
This article quotes no index values. The construction inputs index is published by the Central Bureau of Statistics and its current value changes monthly; anyone who needs a figure should take it from the official publication at the relevant date, not from an article.
What to do before signing
- Read the linkage clause, not only the price.
- Ask the seller for a worked numerical example: if the index rises by X per cent, what will I pay.
- Confirm what is linked in the security you received — see the article on securing a buyer's funds.
- Take advice from your own lawyer on the wording of the clause.
Questions and answers
What is the construction inputs index?
An index measuring the input costs of the construction industry — materials, labour and equipment — published by Israel's Central Bureau of Statistics.
Does the law require the apartment price to be index-linked?
No. The law governs linkage of the security: the guarantee or policy follows the contract's linkage method, and absent one, the construction inputs index. Linkage of the price itself is a contractual matter.
How is the index connected to contractor classification?
Under regulation 6 of the classification regulations, the amounts in the classification table change on 1 April and 1 October each year by the rise in the residential construction inputs index.
What should I check in the linkage clause?
Which index, from which base index, what part of the price is linked, from when, what happens if the index falls, and what happens on late handover.
Where can the index value be found?
In the official publication of the Central Bureau of Statistics, at the relevant date.
Sources
Updated 17.09.2026
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