0% VAT plan could be delayed until year-end

real estate  construction  picture: Tamar Mizpi
real estate construction picture: Tamar Mizpi

First-time homebuyers may have to wait until December before new homes have 0% VAT.

First-time homebuyers may have to wait until December before buying new homes at 0% VAT. Sources inform "Globes" that a compromise is emerging between the Ministry of Finance and opponents of the bill to suspend the debate until October 26, the beginning of the Knesset's winter session, while the bill's opponents will agree to a shortened discussion of the bill during the first week of the session. Opponents of the law made this proposal, and as of now, Finance Ministry officials are making their consent contingent on the agreement of all the opponents of the bill to this compromise.

This proposal means that the Finance Committee, which has been discussing the subject for the past two weeks without making any significant progress, will suspend its discussion. The debate will be resumed during the first week of the winter session without thorough discussion of each of the hundreds of remaining objections to the bill. Informed sources add that if agreement is reached, the Finance Committee is expected to conclude its discussion within a week, and the bill can progress in the second week of the session toward its second and third Knesset readings.

If this scenario occurs, the bill can pass in early November, and according to the bill and the dates set in it, the VAT benefit will go into effect 45 days after the head government assessor calculates the final price tables per apartment sq.m. in each region in Israel according to the approved bill, i.e. around December 2014.

The Finance Committee discussion of 0% VAT scheduled for today has not yet begun, following MK Moshe Gafni's (United Torah Judaism) proposal to the Finance Ministry. No real progress was made in the bill during the recent discussions; opposition MKs continued to attack the bill and speak at length about each of the objections. Various sources have already criticized this behavior by the Finance Committee members. Among other things, Minister of Finance Yair Lapid said last week, "In recent weeks, the dialogue about the bill has become a circus. Instead of dealing with housing, military service, or an entire generation that feels it has no chance of buying an apartment, they're busy with politics and gimmicks."

Gafni asserted several days ago that Prime Minister Benjamin Netanyahu had said he opposed the bill, which aroused a storm in the Finance Committee and the political arena. The Finance Ministry denied this, however, and said that the prime minister had supported the bill, and still did.

Gafni confirmed the contacts with the Finance Ministry, adding, "We won't forego our opposition to the bill, but there is no point in prolonging the discussion at the expense of the Knesset recess. Negotiations on the matter are taking place, and no decision has been reached yet."

Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

real estate  construction  picture: Tamar Mizpi
real estate construction picture: Tamar Mizpi
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