Government May Waive VAT for First-Time Homebuyers

YERUSHALAYIM -

First-time homebuyers in Israel may be able to look forward to a tax break in the near future, after Minister of Housing and Construction Uri Ariel (Jewish Home) pledged on Wednesday to waive the VAT, in a measure to help young couples, Globes reported. Ariel said that the financing would come from the cancellation other tax breaks.

Negotiations with the Ministry of Finance to arrange the VAT break were said to be underway. One of the trade-offs mentioned is elimination of the NIS 100,000 grant for families who move to the periphery, which had been proposed by his predecessor, Ariel Atias (Shas). However, the Ministry of Finance reportedly opposes the plan, which would cost about NIS 3 billion.

“The ultimate beneficiaries of exemptions and discounts on the price of land are the contractors. We’re seeking with the Ministry of Finance ways to directly help young couples,” said Ariel. “A VAT exemption is the best tax break.”

Ariel has promised to bring down the price of a home, a promise made at the Globes-sponsored Real Estate Summit last week.

Regarding the shortage of foreign construction workers, he said he has asked Minister of Defense Moshe Ya’alon to increase the number of Palestinian worker permits to 5,000 and to utilize an additional quota of 1,500 workers. He also said that he was working with the Ministry of Foreign Affairs to bring back Chinese construction workers, but that entailed bilateral agreements.