Steinitz, Attias provide new means to lower home prices

New measures including raising tax rate on "investment" apartments over two years, and capital gains tax exemption for investors who sell.

By JPOST.COM STAFF, SHARON WROBEL
December 16, 2010 11:39
1 minute read.
Sales of brand new homes dropped 5% in the first q

construction tel aviv 311. (photo credit: Ariel Jerozolimski)

Finance Minister Yuval Steinitz and Housing Minister Ariel Attias held a press conference morning where they announced additional steps to lower housing prices.

Among the steps mentioned by the ministers were raising the tax rate on apartment purchased over the course of the next two years. Also, rental apartment investors who sell their apartment during the same period will receive a exemption on capital gain taxes on the sale, without having to wait for the previously required four years of ownership.

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According to the Consumer Price Index published Wednesday, apartment prices rose by 0.4 percent in recent weeks. The figures also released that apartment prices jumped 18% in the past year compared to the corresponding figure in 2009.

Earlier in October, the Bank of Israel announced its decision to deflate the local real estate bubble by tightening lending standards for mortgages above NIS 800,000. However, the Bank made sure to state that the move would not apply to young couples purchasing their first homes.

“The new guidelines were introduced in light of a continued surge in house prices over the past years and the growth in housing credit that exceeds increases in average household income,” Supervisor of Banks Rony Hizkiyahu said, in a telephone interview following the announcement.


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