More than a month has passed since the last housing cabinet meeting, and no decisions have been taken to implement the target price plan. At the meeting on March 24, Minister of Finance Yair Lapid and Minister of Housing and Construction Uri Ariel agreed that the zero VAT plan for the purchase of a first home would come up for a vote, and that the target price plan would receive support in principle and would go ahead with mediation by the Prime Minister's Office.
At that meeting, Lapid's zero VAT plan was unanimously approved, and it was decided that, within 21 days, the criteria for target price tenders would be drawn up, including the areas where the tenders would be published and which segments of the population would be eligible for the discounted apartments.
The criteria were supposed to be drawn up by representatives of the Ministry of Finance, the Ministry of Construction and Housing, and the Prime Minister's Office. Ariel even said that a meeting of the Israel Land Authority council had been scheduled for April 28, at which the plan would be voted on. However, sources close to the matter say that the timetable will be extended, because no progress has been made to date, and that the Land Authority council meeting will be postponed.
In addition to the Passover holiday, during which civil servants did not work, disagreements between the parties are delaying implementation. For example, no agreement has yet been reached about the areas where the Ministry of Housing can publish target price tenders. The Ministry of Finance insists that the tenders will not be published as part of the blanket agreements that have been signed, or which will be signed, with municipalities. (To date, blanket agreements have been signed with the Modiin, Kiryat Gat, and Rosh Ha'Ayin municipalities). In addition, it has not been decided whether target price tenders will apply to people moving upmarket or only to first-time homebuyers.
Target price tenders are scheduled to be published in 2014-18. Target price means that the maximum price for an apartment will be 80% of the median price per square meter of the built space of a new apartment in the area where the land in the tender is sold. The median price will be set by the Government Assessor. In other words, these new apartments will cost 20% less than the market price. Homebuyers will have to choose between participating in target price tenders and receiving the zero VAT tax break.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2014
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