Finance Minister Moshe Kahlon is proposing a new home tax in an effort to generate additional state revenue. Kahlon hopes to have the draft ready to present to the cabinet in August, together with the state budget.

Kahlon wants to target people who own three or more homes, taxing them NIS 12,000 annually per each home (NIS 1,000 a month). He explains this is far less confusing than previous versions to levy such a tax, which were based on percentages. Here he explains, everyone will pay a flat rate, NIS 1,000 per month per additional home.

An optimistic Finance Minister believes this tax, if approved, would net close to NIS 1 billion annually as 55,000 Israelis own more than three homes. The treasury adds some 200,000 own at least two homes, usually one to live in and one for an investment. 38,000 Israelis have three homes and 10,000 have at least four homes. And there is the elite club of 6,000 that have “a number of homes”, exceeding four. The tax, if approved, would only apply beginning with the fourth home, which the treasury explains would impact 85,000 homes.

According to the Central Bureau of Statistics, 600,000 homes are rented out annually in Israel. The treasury however has a different number, citing there are fewer than 300,000 rentals. This points to a significant discrepancy in figures that are relied upon to influence state policy.

While some may be feeling sorry for homeowners who will be taxed, it is more than likely that part or all of this tax will be absorbed by tenants renting these homes.

(YWN – Israel Desk, Jerusalem)