Court Suspends Third-Apartment Tax, Awaits State’s Response

Construction on the Gindi project apartment and office buildings in Tel Aviv. (Nati Shohat/Flash90)

On Wednesday, the state was preparing to respond to an order by the High Court a day earlier halting the collection of the Third-Apartment Tax, after a lawsuit filed against the law in January reached the court’s desk. Given the charges in the lawsuit — that the process under which the law was passed was “tainted,” violating Basic Laws in the Knesset and government — the state has been given until March 23rd to respond as to why the court should not rule the law unconstitutional.

The lawsuit is one of at least four filed against the law. This lawsuit was filed by opposition parties, who claimed that the tax violates the Basic Laws, the Israeli version of a constitution. “The legislation of this law was conducted in a bullying and intimidating manner, and this cannot be the source of a law in this country,” said MK Miki Rosenthal (Zionist Camp), one of the MKs who filed the petition. “We cannot allow the standing of the Knesset and the democratic process to be compromised in the manner that occurred in the passage of this law. The legislation process of this law occurred in an illegal manner, with MKs not even able to study the law in advance.”

It will be recalled that the Third-Apartment Tax was pushed through in a marathon all-night session in December, with a vote to approve it conducted in the early morning hours. MK Rabbi Moshe Gafni — chairman of the Knesset Finance Committee, which gave its final approval to the law — said that despite his own misgivings about it, he was not planning to repeat the experience and conduct new hearings about the bill. The measure was attached to the Arrangements Law, which was approved along with the state budget.

The petitioners, led by Rosenthal, stated in the petition that they did not necessarily oppose the law itself, but rather the problematic way in which it was pushed through. “The method by which this law was passed was extreme in that the basic methods of dealing with legislation were ignored, including the principle of full participation by all MKs in the legislative process.”

Speaking after the High Court decision Tuesday night, Rosenthal said that all she and other MKs had asked for was time to study the law — time that was denied them. “The Knesset refused to postpone the vote, even by just a few hours,” she said. “They just rammed it through. For the government, the Knesset is apparently just a rubber stamp.”

Under the tax, which went into effect January 1st, landlords will pay a 1 percent tax per month on the assessed value of each home or apartment they own, beginning with the third property, up to a limit of NIS 1,500 per month, a total of NIS 18,000 a year. As the average value of homes in most cities is more than NIS 1.5 million, it is expected that most of the Israelis who will have to pay the tax will pay the full amount. The law is expected to affect 50,000 people, who own a total of 180,000 homes.