The Ministerial Committee for Legislative Affairs this morning (Sunday) took another step in the fight against high housing prices and approved the amendments to the legislation on real estate taxation. These measures are intended to make it easier for young couples to purchase their first apartment, to increase the supply of apartments and to reduce excess demand in the housing market.
Purchase tax relief and construction encouragement on private land
Three steps were approved by the ministers. The first of them is Purchase tax relief for young couples: In order to make it easier for young couples, the amount ceiling for raising the purchase tax for young couples for the purchase of their first apartment will be raised. Increase from NIS 1,805,000 to NIS 1,930,000. This step will save thousands of shekels for young couples in purchasing the apartment.
The second approved legislative amendment is Encouraging construction on private land: Providing significant tax benefits to private landowners, intended for residential apartments, to the extent that they exercise the building rights in their area in the coming years. At the same time, landowners who continue to hold vacant land and do not exercise the building rights to residential apartments in the coming years will demand more significant tax payments. This move is expected to lead to the construction of thousands of housing units in the coming years.
The last step approved by the ministers is Cooling excess demand in the housing market: Adjusting the tax benefits in the housing market so that we cool down excess demand that leads to a rise in housing prices. This is with an emphasis on cooling the demand of foreign investors in the housing market in Israel who will not receive the same benefits as Israeli first-time home buyers.
Finance Minister Avigdor Lieberman said that, “Another tier in the housing plan is underway. Amending the tax legislation for the benefit of young couples and for the benefit of increasing supply is a necessary step, especially during this period.”