Kahlon calls for upping tax on residential real estate investors
The logic behind a tax increase is to make it less profitable for investors to buy apartments and rent them out, thus keeping more apartments on the market for people who want to buy them.
By NIV ELISMOSHE KAHLON (center) visits with fellow Koolanu candidates(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Moshe Kahlon, the expected finance minister, confirmed that he intends to significantly increase taxes on investments in residential apartments.“Some 25 percent of those purchasing second apartments are investors. We need to extract them from the market,” Kahlon said in a Channel 2 interview that aired on Saturday, the first since his Kulanu party on Wednesday an agreement to join the government coalition.The logic behind a tax increase is to make it less profitable for investors to buy apartments and rent them out, thus keeping more apartments on the market for people who want to buy them. The tax would not apply to those buying homes they intend to live in.Though the Finance Ministry is said to recommend increasing the tax rate from the current 5% to 10% level to 20%, Kahlon said that figure is too high, and that the intention is not to completely clear investors from the market or upset the rental market. According to Channel 2, a bump to 20% could make the tax an investor pays up to 20 times more than a regular home-buyer.Kahlon emphasized that the step is just the first in bringing down the cost of housing. In his election campaign, he called for breaking apart the Israel Lands Authority to bring down the price of land, and reducing the bureaucratic process surrounding construction, which is one of the most lengthy and costly in the world.“We came to the government to solve the housing problem by building, not by taxing,” he said, urging the public to wait before buying an apartment.Kahlon also reiterated his support for public transport on Shabbat.The coalition already has the haredi United Torah Judaism Party on board and is expected to soon include Shas as well – both of which oppose public transport on Shabbat. Kahlon said it is a social issue.
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