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Photo by: Adi Benzaken
Doubling of property taxes on capital’s ‘ghost apartments’ expected to be ratified
By DANIEL K. EISENBUD
17/06/2014
Over 10,000 owned but uninhabited residences have drained city’s economy, created cost-prohibitive market for young residents, says deputy mayor.
 
Following three years of intensive lobbying by Deputy Mayor Ofer Berkowitz (Jerusalem Awakening), a sweeping measure to double property taxes on the capital’s over 10,000 “ghost apartments” is expected to be approved next week, Berkowitz said Tuesday.

According to Berkowitz, the secondary residences, which are utilized for a fraction of the year, will be subject to the new tax beginning on January 1 if they are uninhabited for nine months of the year.

The phenomenon, typically propagated by wealthy Diaspora Jews, has markedly reduced the city’s housing supply, resulting in under-uninhabited neighborhoods and stalled housing and economic growth, he said.

Berkowitz, who is also chairman of the Jerusalem Municipality’s budget committee, said the capital has over 10,000 apartments that meet such criteria.

“Expensive housing impairs the ability of young people to stay in Jerusalem and build their homes and lives here,” he said. “We believe that some of these people will rent their apartments because of this decision.”

Berkowitz added that the new law will send a strong message to wealthy absentee owners.

“The message is very clear: Owning an apartment and not using it hurts the market, and if they get the message and rent out these units while they’re not here, that will help tremendously,” he said.

The deputy mayor emphasized that the law is not meant as a punitive measure so much as a means to encourage young Jerusalemites to stay in the city and stimulate an otherwise anemic economy.

“I’m not angry with these people and don’t want to penalize them – I really don’t think they are aware that they are hurting Jerusalem,” he said. “I just want to send the message that if we increase the number of apartments on the market, we will increase money coming into the city.”

Moreover, Berkowitz also recently submitted a measure to the Finance Ministry addressing the capital’s roughly 1,500 abandoned commercial buildings.

“On top of the 10,000 empty apartments in the capital, there are 1,500 abandoned buildings that we’re also trying to get back on the market,” he said. “We are proposing to make another law about this issue so we can improve the economy and add more jobs and culture.”

Present commercial property laws stipulate that once a building is declared abandoned, its owners are not required to pay property taxes for three years and can extend nonpayment for an additional five years.

“All this does is further drain the city’s economy,” said Berkowitz.
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