New Tax Targets Israeli Homebuyers

YERUSHALAYIM -

A new tax targets the country’s largest segment of homebuyers — people who want to sell their only apartment in order to buy a new one — Globes reported on Monday.

The report was based on Ministry of Housing and Construction data, which Globes noted,  contradict figures issued by the Ministry of Finance, which claims that first-time homebuyers are the largest part of the real estate market.

The Ministry of Housing study of all residential transactions in 63 towns nationwide between June 2012 and February 2013 shows that people moving upmarket — people who previously owned an apartment, or who bought an apartment and declared their intent to sell it — accounted for 37.3% of all transactions, compared with 36.3% by first-time homebuyers, and 21.6% by investors (people who own two or more apartments). Foreign residents accounted for 2.8% of all transactions, and 2% are classified as “other,” such as apartments bought by companies for business purposes.

The Ministry of Finance plans to levy a purchase tax of 3.5% from the first shekel on a new home for people moving upmarket.

While not evading responsibity for it, Minister of Finance Yair Lapid expressed his personal distaste for the new tax over the weekend, saying, “The purchase tax on people moving upmarket is the tax that I hate the most. We will abolish it in the future.”