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The high court voted for the repeal of the law on tax on third apartment

Sunday, August 6, the Supreme court of justice voted for the repeal of the Law on the taxation of a third apartment because of the «fundamental mistakes» made in the legislative process. A panel of judges recommended to return the law for revision to the Finance Committee of the Knesset.

The President of the court Miriam Naor, in its decision noted that the adoption of this law was «crossed all red lines».

The judges criticized the haste with which he accepted the law when deputies have not had the opportunity to study the bill carefully and compare the old text, as revised by the amendments and that the vote on the bill was scheduled for night time when the deputies were already tired, and the agenda was attended by other equally important issues.

In may, considering the lawsuits filed by members of the parliamentary opposition, as well as property owners and investors, the high court had already recommended the government to return the law for revision. However, this requirement was rejected. In the text of the official response, prepared by the legal adviser to the government, stated that Finance Minister Moshe Kahlon, one of the defendants oppose its abolition, as it inevitably will negatively affect the real estate market in Israel and will break on the positive trends. The legislators argued that the law in Israel has decreased the number of investment apartments, the rise in housing prices has slowed, investors began to put their own apartments up for sale, thereby increasing supply on the secondary housing market.

According to the law, whose fate is currently in question, the tax was to be levied on owners of three or more apartments. The amount of the tax was to be 1% of the value of the apartment, while the maximum size was not to exceed 18 thousand shekels a year. It is about 1,500 shekels per month with one apartment.

According to the Ministry of Finance and Tax administration, the law would get about 50 thousand property owners in Israel.

Finance Minister Moshe Kahlon on his page on the social network Facebook has reacted to the decision of the High court of justice to cancel the law on tax on third apartment, designed to encourage investors to put up apartments for sale.

«I am saddened and deeply disappointed by the decision of the high court to cancel the law on the taxation of a third apartment, says Moshe Kahlon. I’m sure tens of thousands of young families experiencing the same disappointment. Well, this is not the first difficulty in our way. We overcame many difficulties on the part of the owners of capital, from banks, from financial institutions, on the part of interested parties who want to apartment prices only rose, leaving the young couple farther and farther from their dream of their own homes. But I promise you that we will continue to fight with investors because it is wrong when one man holds four, five or six apartments, and the other never will be no apartment, no chance to buy it. We will continue to fight for young families in all possible ways».

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The high court voted for the repeal of the law on tax on third apartment 06.08.2017

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