Bill turned to motion: Nonresidents who buy real estate in Israel would pay purchase tax at rate of 20% of sales value
Publicized: March 6, 2012
The Knesset plenum changed the land taxation bill (appraisal and purchase) (amendment-purchase tax for nonresidents) 2011, by Knesset Member Marina Solodkin (Kadima) to a motion, with Solodkin`s permission.
The bill proposes a tax at the rate of 20% of sales value for nonresidents who buy real estate in Israel.
The bill`s explanation states: ”In the last few years we have witnessed a stark rise in housing costs, whether for buying or renting. As a result, many Israeli citizens who belong to the weak layers and the middle classes are unable to rent or buy an apartment. This rise in housing costs was one of the sources for the wave of social protest in the last few months.
”We are also witnesses to another phenomenon: massive purchasing of apartments and houses in Israel by nonresidents who possess the house or apartments as an asset. These nonresidents do not live in the properties they purchase in Israel, nor do they rent them out to Israelis. As a result, today there are residences and even residential neighborhoods (primarily in the high-demand area) purchased by nonresidents, and no one lives in them.
This phenomenon reduces the existing stock of houses and apartments on the market for sale or rent, raises other prices and exacerbates the problem of a dearth in affordable housing.
Therefore, the bill proposes levying a tax at the rate of 20% of the sales value on nonresidents who buy real estate in Israel, with the intention of reducing purchases from that sector, and of increasing the amount of houses for sale and rent in Israel.”
Six MKs supported changing the bill to a motion, with no opposition. The motion will move to the Knesset Committee, which will elect a committee to discuss the motion.
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