Rent in Israel Could Increase with New Tax Rules
August 10, 2016 Taxation in Israel
TEL AVIV – New tax rules in Israel could lower the price of buying a new apartment, at the potential cost of raising the price of rent in the country.
Property experts in Israel are warning that newly proposed regulations on the taxation of apartments could lead to a dramatic increase in rental prices across the country.
The new rules, which were put forward by the national Minister of Finance Moshe Kahlon, would see owners of three or more apartments pay a new monthly tax.
The amount of tax to be paid will be set at 1 percent of the value of the apartment, with the value to be determined by the government.
The tax would be capped at either ILS 1 500 per month, to a maximum of ILS 18 000 per year.
The government believes that such a tax would encourage owners of several apartments to sell some of their holdings, while at the same time not affecting taxpayers who own their own home, or taxpayers who have a single investment property.
However, some experts believe that property owners would not end up selling their apartments, but, instead, passing on the extra costs to rent payers.
It is estimated that as many as 60 000 property owners in the country would be eligible to pay the new tax if they do not dispose of some of their holdings.
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