Cabinet approves significant housing legislation

Cabinet approves new social justice package on housing. Plan includes doubling property taxes on ‘ghost apartments’ vacant for more than six months a year

By MICHAL SHMULOVICH, Times of Israel

Own an apartment in Israel but don’t live in it most of the year? Get ready to pay double in property taxes. The cabinet on Sunday adopted a series of recommendations on housing put forward by the Trajtenberg Committee, aiming to fix tax loopholes, reduce costs and add more housing units to a country that has seen home prices balloon in recent years.

This is the fourth section of the Trajtenberg report to be adopted by the cabinet. According to a government statement, approval of the main recommendations of the section is expected to lead to a significant increase in the number of residential apartments available throughout the country.

One of the recommendations adopted is aimed at people who own “ghost apartments” — apartments that are not lived in by their owners. Units that stand empty for over six months a year will be charged double the property tax. The government statement said the move is likely to release over 15,000 apartments into the housing market, presumably by encouraging those owners to sell or rent their apartments.

The plan also calls on the state to market 187,000 new housing units over the next five years, 60% of them in high demand areas.

The government will also allocate NIS 800 million over the next five years to increase aid for public housing. The maximum rental assistance for those eligible for public housing will rise from NIS 1,750 per month to NIS 3,000.

Professor Manuel Trajtenberg, who heads the committee, said the recommendations will help thousands of young couples buy apartments.

Jerusalem Mayor Nir Barkat welcomed the move to add more units to the housing market, saying the cabinet was following in the footsteps of the Jerusalem Municipality, which already increased municipal taxes on ghost apartments a few months ago, but added, “There is still a long way to go.”

The Trajtenberg Committee was established last August after mass social protests took place across the country.

March 18, 2012 | 4 Comments »

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4 Comments / 4 Comments

  1. Wow ! This is the Israeli socialist government’s arrogance at its best. The apartments are private property, aren’t they? If so, what’s the governement’s business if those are empty or not?

  2. How will they determine that an apartment is empty for 6 months? Is that 6 months consecutively?
    What if an owner lives in it every other month? How will the govt have any idea that it is empty.
    And how did they come up with the figure that 15,000 apartments will be added to the market? If the
    apartment owner in chutz la’aretz does not want to pay the penalty they will either rent it
    at the highest rate possible (no help for students) or sell at a high price to someone else who either
    can afford the double-tax (also no help). This is just politicians acting like they care about the
    public. It is all mirrors and tricks.

  3. As a person who lives in the Jerusalem area, I applaud any effort to make housing more available, but this one seems a little counter-intuitive. If you have someone who owns an apartment that they live in for 2 or 4 weeks per year (when they visit), raising the taxes for keeping it empty will encourage them to rent it out when they are away, but not for the whole year – otherwise, where will they stay when they come to visit? That makes more vacation housing available for other tourists, but it doesn’t help those of us who live here. It could potentially create more problems as people faced with no other options sign 6 or 8 month rental agreements because no one is renting their homes for a whole year.

  4. THIS IS A GREAT IDEA JUST OUT OF SODOM AND –IF YOU USED THE BRIDGE IN SODOM U PAID A DOLLAR TOLL IF YOU SWAM ACROSS THE RIVER YOU PAID TWO DOLLARS–
    IF YOU LIVE IN THE APT AND USE THE COUNTRY RESOURCES YOU PAY XYZ IF YOU DO NOT USE IT YOU PAY 2X

    IT WILL ALSO INCREASE THE COST OF RENTALS AS THE COST WILL BE PASSED ON TENS OF THOUSANDS APTS ARE RENTED OUT TO PEOPLE WHO CANNOT AFFORD THE ASTRONOMICAL COSTS OF HOUSING –

    THE REASON THE A HOUSING COSTS ARE SO HIGH IS BECAUSE THE GOV OWNS THE LAND AND CHARGES ASTRONOMICAL FEES TO USE IT (NO IN ISRAEL U NEVER OWN THE LAND YOUR DIRA SITS ON U ONLY THINK YOU OWN IT- READ THE SMALL PRINT
    THE LAND COSTS AMOUNT TO HALF THE COST OF THE APT.