Finance Minister Yair Lapid has announced a new housing plan that will permit qualified couples to purchase an apartment without paying 18% value added tax, a significant reduction on such a large purchase.
According to the new plan revealed in Yediot Achronot, a young couple seeking to buy a first apartment from a contractor may be permitted to do so without VAT in certain cases. Lapid is proud of his new program, which some experts feel is populist, explaining there is already a housing shortage. This will create an even larger shortage they explain, which in turn will drive up the prices even more. It is estimated the loss of VAT revenue will cost the national government 2 billion shekels annually.
The Lapid plan, which is being decried as “discriminatory” by chareidim will be presented to the Apartment Cabinet for approval next Monday, 22 Adar II.
Another component of the plan includes a government adjuster setting a ceiling on the price per square meter for different areas of the country. From a technical standpoint, the VAT will not be eliminated but it will be zero, thereby permitting the contractor to still receive appropriate VAT payments on materials back from the Tax Authority.
· Young couples that have not yet purchased a home
· At least one of the couple has served in the IDF or national service
· At least one of the couple works
Once purchased, the couple will not be permitted to sell the apartment for five years. If one does sell it prematurely, the couple will have to pay the VAT retroactively.
While chareidi lawmakers are shouting “discrimination”, others prefer to view the new plan as a benefit for those citizens willing to serve in the IDF and/or an approved national service.
Chareidim however maintain this is not presented as an IDF benefit package but as a housing package for young couples. As such it should be equal for all young couples. In addition, if it were exclusively for vets, then it would not contain the component insisting one of the couple must be employed, with the latter signaling it is meant to exclude chareidim.
(YWN – Israel Desk, Jerusalem)