Treasury preparing changes to multi-home tax

Moshe Kahlon (Photo: Ouria Tadmor)

Coalition chairman David Bitan: There's no majority for the new tax.

The Ministry of Finance is preparing to make changes in its proposal for taxing owners of three or more homes. Sources inform "Globes" that the Ministry of Finance is determined to pass the measure, which is drawing criticism from politicians, but believes that changes in it are unavoidable. Coalition chairman MK David Bitan (Likud), who has announced his opposition to the bill in its current form, said today that one of the ideas under consideration is restricting the tax to those owning homes with an aggregate value in excess of a specific threshold.

He was joined yesterday by Knesset House Committee chairman MK Yoav Kisch (Likud), who called for separating the tax from the Economic Arrangements Bill. The Knesset House Committee decides which clauses will be removed from the Economic Arrangements Bill, and which will be retained in it.

As reported by "Globes," the Ministry of Finance intends to propose that investors selling housing units following the imposition of the tax should invest their money in a bank deposit linked to the housing price index.

Bitan said, "There's currently no coalition majority in favor of this bill. That's obvious. If the Minister of Finance insists that it be passed on its first reading, it will pass, but we'll revise the bill after it reaches the Finance Committee. It can't pass in this form. I don't know who's making all these proposals to the Minister of Finance - they aren't lowering the price of housing; they're only increasing state tax revenues. This tax is listed in the budget at NIS 800 million."

Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism) said this week that the third home tax would not pass the Knesset. In an interview with Galei Tzahal (Army Radio), he declared, "As chairman of the committee, I raised the purchase tax to 8%, and it did nothing to housing prices. People have property rights. They pay taxes, VAT, they paid them all, and at the end of that, they're told they have to pay more tax. Furthermore, if someone has three homes in Ofakim barely worth NIS 1 million, and someone else has two apartments in Akirov Towers in Tel Aviv worth NIS 40 million, the latter won't pay any tax. I have experience in raising taxes on housing units. It won't lower housing prices; it will put a lot of money into the state treasury."

Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Moshe Kahlon (Photo: Ouria Tadmor)
Moshe Kahlon (Photo: Ouria Tadmor)
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