Israel Doubles Tax on Empty Properties
December 10, 2013 Taxation in Israel
On December 9th the Knesset’s Finance Committee approved a new legislative bill doubling the property taxes levied on unoccupied residential properties and on second homes which are not regularly used by the owners.
The increased tax will apply to any residential property which has been unoccupied for a period of more than nine months, regardless of whether it is a holiday home or an investment property, or whether the owner is a resident of Israel or an overseas citizen.
The government currently estimates that approximately 47 000 properties are currently classified as unoccupied, 20 percent of which are in the city of Jerusalem.
The proposal to double the tax on unoccupied properties was initially raised in 2011 by a government appointed committee, and was given Cabinet approval in March 2012.
The government intends that the tax hike will encourage thousands of property owners to put unoccupied properties on the rental market, freeing up swathes of new houses and easing the country’s housing shortage, especially for young people and low income families.
The responsibility of checking whether properties are occupied will fall to local councils, which will check their status using information about water usage at the location.
The extra revenues raised from the tax hike will be earmarked for use by the respective local council collecting the tax.
Photo by: Steve Paul