Minister of Housing and Construction Ariel Atias is calling on the government to launch a plan to help young couples buy their first homes. In response to the Ministry of Finance proposal to fight rising home prices, he said that while the plan was welcome, it does not go far enough.
"Direct incentives should be given to young first-time homebuyers," Atias said. He presented the Ministry of Finance his plan, which will exempt VAT on purchases of a first home in the periphery.
Figures of the Ministry of Finance and Ministry of Housing indicate that the average home costs about NIS 1 million including VAT, which means that the VAT is NIS 138,000.
Atias also proposes that the Ministry of Housing participate in mortgage payments by young couples in the periphery, at a rate of 20% over 20 years. According to AMG Financial Models Ltd., the average mortgage was NIS 620,000 in 2009, indicating that Atias is proposing a benefit of NIS 124,000.
"These measures," said Atias, "will immediately reduce the burden on young couples buying homes, and will correct the discrimination young couples suffer from."
Discussions between Atias and Minister of Finance Yuval Steinitz will continue over the coming weeks before the budget is submitted to the cabinet and the Knesset.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2010
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