Court Strikes Down Third-Apartment Tax

Israel’s High Court voided a tax enacted recently on owners of multiple housing units, intended to ease the housing shortage, on procedural grounds, on Sunday, according to media reports.

The measure, pushed through the Knesset by Finance Minister Moshe Kahlon last December, imposed a 1-percent tax on rental income for owners of three or more housing units in Israel. Ministry officials hoped the tax would give an incentive to sell off the properties and free up as many as 180,000 housing units for the general market.

However, in the view of the judges, Kahlon pushed too hard. They upheld the claims of a petition submitted by opposition parties that it had been passed without proper debate or committee hearings. In March, the court issued an injunction against the tax, blocking its implementation until it could pass judgment on its legality.

On Sunday, the court ordered that it be nullified and that a review by the Knesset Finance Committee should be undertaken.

“There was no alternative but to decide that the legislation process of the multiple apartments tax was defective at the very roots of the procedure,” Justice Noam Sohlberg said.