Israel’s Hunt For Ghost Apartments Not Succeeding

November 17, 2016 Taxation in Israel

Empty ApartmentTEL AVIV – Israel’s tax on empty property is not seeing the expected results, as authorities are unable to locate the empty apartment.

On November 15th the Knesset of Israel revealed that the new tax on “ghost apartments” has not had the intended effect, with only a small portion of taxpayers who should be required to pay the tax being made aware of their obligations.

Earlier this year the government of Israel enacted a new regulation which required that a taxpayer pays double the standard rate of property tax on vacant residential property.

The rate for these so-called “ghost apartments” is ILS 223.56 per square meter of the apartment.

It is estimated that there may as many as 48 000 empty residential apartments in Israel, with a significant portion belonging to overseas owners who use the property as vacation homes.

However, authorities have not been successful at identifying all the “ghost apartments” as currently the only method to determine whether an apartment is occupied is by inspecting its water usage.

Authorities have requested that the scope of their available tools is expanded to include electricity and gas bills.

Currently the new raised tax rate has brought in only 40 percent of the extra tax revenue that was anticipated.