Beginning in January 2019, buyers of apartments in Israel will be required to report to the Tax Authority how they paid and where they obtained the money for the apartment they purchased, otherwise they will not be able to obtain approval from the Tax Authority for the list of the apartment in the Land Registry.

According to the report by Ofer Petersburg and Elitzafan Rosenberg in the Money supplement in Yediot Achronot, since at times, the buyer may not know where the source of all the funding at the time of signing a contract, a buyer has up to a half year to file the report with the Tax Authority.

Over the past year, since December last year, every real estate transaction was required to be reported to the Tax Authority via the Shevach.net online system by an attorney, but it was not mandatory to report how the property was purchased.

Now, according to ‘Money’, this will change under the law to limit the use of cash. For the purposes of the report, the Tax Authority has prepared a dedicated interface in which the purchaser himself can report from where he obtained the financing for the purchase of the apartment, as aforesaid, up to six months from the date of receiving the property.

But it’s not just that. As of January, it will not be possible to pay in cash in any transaction or service that costs more than NIS 11,000. This is part of the ongoing global effort by governments to eliminate the use of ‘black money’, funds obtained illegally, ‘under the table’, without reporting to various government agencies. Israel has been working particularly hard in advancing rapidly in this area. The government wants everything on record and every transaction traceable.

According to the report, if you make a purchase for more than NIS 11,000, you will not be able to pay in cash, but only by check, bank transfer or digital or credit card. However, you can pay in cash only up to ten percent of the price of the transaction, provided that this amount does not exceed NIS 11,000.

For example, it will not be possible to pay for renovations in cash when the Tax Authority makes it clear that whoever pays in cash, it will be a crime not only of the recipient of the money but also of the person paying.

(YWN Israel Desk – Jerusalem)