The committee, headed by MK Moshe Gafni, approved today (Monday) the Treasury’s request to extend the high purchase tax rate (for investors), which was set to expire in three weeks, by an additional two years. President of the Association of Contractors: “A disastrous decision, the Treasury ignores that reducing the purchase tax to its normal levels would have led to an increase of NIS 5 billion in government revenues.”
By Nadlan Center
The Finance Committee, headed by MK Moshe Gafni, approved today (Monday) the extension of the 8% high purchase tax rate on property investors. According to the decision, the current tax rate will be extended for two years until the end of 2026. The discussion was held three weeks before the expiration date of the temporary order, which raised the tax from 5% to 8% during Avigdor Lieberman’s tenure as Minister of Finance.
Calculate your real estate purchase tax in Israel with the easy-to-use Buyitinisrael calculator!
President of the Association of Contractors and Builders of Israel, Raul Srugo, issued a statement condemning the committee’s decision and said: “This is a disastrous decision by the Budget Division and the Minister of Finance, who imposed coalition discipline on the Finance Committee in this matter. This is even though during the committee’s discussion, it became clear that an overwhelming majority of its members believe that a high purchase tax is currently bad for the housing market, the economy, and the citizens of Israel.
“There is no doubt that an opportunity was missed to bring investors back to the housing market when they are greatly needed due to a dramatic drop in demand during the era of high interest rates and in light of the effects of the war. This is an opportunity to increase the supply of rental apartments to curb the surge in rental prices that continues to drive inflation and interest rates in the economy. The Treasury ignores that reducing the purchase tax to its normal levels would have increased NIS 5 billion in government revenues, particularly when it is struggling with a deficit due to a decreased income. This is a bad decision for which all the country’s citizens will pay the price.”
