Kachlon Seeks New Taxes on Real Estate ‘Moguls’

Yoo Tel Aviv is a complex of two luxury residential skyscrapers in Tel Aviv, built in 2007 by Habas HZ Investments, now facing towers of debt. (Flash 90)
Yoo Towers, Tel Aviv. (Flash90)

By Dror Halavy

YERUSHALAYIM – In an effort to raise money and discourage investment in real estate for wealthy Israelis, Finance Minister Moshe Kachlon is advancing a special tax to be imposed on Israelis who own three or more homes. The proposal will be included in the Arrangements Law, which is set to be presented to MKs along with the state budget in mid-August.

The tax will cost these real estate “moguls” NIS 12,000 a year. The proposal, according to Kachlon, has several advantages. Besides discouraging investments in real estate by wealthy Israelis, the tax could bring in as much as a billion shekels in income for the state.

According to Finance Ministry figures, there are over 55,000 Israelis who are the registered owners of three or more homes. Some 200,000 have two homes, one a primary residence and the other an investment. 38,000 have three homes, 10,000 have four, and 6,000 have five or more.

In addition to the special ownership tax, the Treasury is considering reinstituting a wealth tax that was canceled 16 years ago. The tax would be aimed strictly at homeowners of multiple properties, and amount to 2.5 percent of the value of the property annually. This tax would also likely discourage investment purchases and bring in an additional half billion shekels in taxes to the state coffers.