The Knesset Finance Committee on Monday approved a sweeping measure submitted by
the Interior Minister to double property taxes on the nation’s tens of thousands
of “ghost apartments,” or secondary residences that owners utilize for a
fraction of the year.
The problematic phenomenon, typically propagated by
wealthy Diaspora Jews, has markedly reduced the nation’s housing supply,
resulting in under-uninhabited neighborhoods, stalled housing growth and nominal
According to data submitted to the socioeconomic
cabinet, there are presently approximately 47,000 apartments in the country not
actively in use.
Apartments meet such criteria if they are uninhabited
for nine months of the year.
Tel Aviv, Haifa and Jerusalem make up a
disproportionate concentration of such units, the data show.
Minister Yair Lapid lauded the tax approval Monday afternoon as instrumental in
resolving the present housing crisis.
“Today’s approval is another step
that will help increase the supply of housing in Israel,” he said. “I will
continue to use all possible avenues to solve the housing shortage and
facilitate the Israeli middle class.”
Interior Minister Gideon Sa’ar
echoed Lapid’s sentiments, noting the measure will spur growth by forcing some
absentee homeowners to rent out their residences, thus generating less costly
alternatives for young residents who otherwise cannot afford presently
“We must take every possible step to increase the
supply of homes on the market for rent or purchase,” said
“Increasing property taxes on residential apartments that are not
used will encourage renting apartments, increase the supply of housing in
existing structures and assist in maintaining the urban
According to Jerusalem Deputy Mayor Ofer Berkowitz (Jerusalem
Awakening) the capital has roughly 10,000 ghost apartments, which has stymied
the market and dramatically increased rental costs for young
“Expensive housing impairs the ability of young people to stay
in Jerusalem and build their homes and lives here,” said Berkowitz. “We believe
that some of these people will rent their apartments because of this
Berkowitz, who has championed the cause for over three years
by actively lobbying the Interior Ministry and Finance Ministry’s to take
action, added that the new law will send a strong message to wealthy property
owners who rarely inhabit their homes.
“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
Berkowitz 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 hemorrhaging 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 said he also
intends to submit a measure to the Finance Ministry addressing the roughly 1,500
abandoned commercial buildings in the capital.
“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
According to Berkowitz, 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,” he said.
The tax increase on ghost apartments is scheduled to
go into effect on January 1.Lahav Harkov contributed to this report.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders