Apartment building 311.
(photo credit: Ronen Zvulun / Reuters)
Israeli real-estate brokers with foreign clientele have reacted with mixed
emotions to the cabinet’s decision to double property tax on empty apartments,
with many worried about a negative reaction from home owners.
government this week approved a proposal to double the arnona ceiling for
apartments that stand empty for more than half a year, as part of its passage of
the Trajtenberg Report’s housing chapter. Other measures include instructing the
Israel Land Administration to market 187,000 new apartments over the next five
years and increasing maximum rental assistance for individuals eligible for
The government’s measure could potentially aggravate
foreign property owners, Stay at my Place founder Simon Berkley, whose firm
organizes short- and medium-term Israeli rentals for mainly English-speaking
visitors, told The Jerusalem Post
“They would ask: ‘Why are
you targeting us, when we’re Zionists who bring money to your country, come here
three times a year and put money into your economy?’” he said. “‘We’ve bought an
apartment here; we already pay taxes, gas and electricity bills and everything
else we must spend for the upkeep of out flat.’” Berkley acknowledged the
measure would achieve its intended aim of increasing housing supply to local
residents. But he said the government should find a less-confrontational way to
encourage home owners to lease their empty apartments.
“I actually see a
lot more people willing to rent their places out now than they were before,
because their businesses aren’t doing as well,” Berkley said of his mostly
“I guess if they knew how much they could earn by
renting them out anyway, they would choose to do so without being
The government estimates about 140,000 apartments and offices
throughout the country are devoid of occupants and hopes its arnona decision
will put 15,000 empty units back on the market each year.
surveyed several Tel Aviv real-estate agencies that cater exclusively to the
French market. All of them said empty apartments in Tel Aviv are a thing of the
past because most French owners now either inhabit their properties full-time or
rent them out on a short- or medium-term basis.
However, the problem
still exists in locations such as Ashdod, according to one agent. He said there
are about 300 empty French-owned apartments near the marina, and since tourists
prefer to stay in central Israel, there is practically no demand for short-term
rentals in the South.
Another agent said doubling arnona would be good
for the Israeli market, but it could dampen foreign enthusiasm for the Israeli
property market. It might also encourage owners to sign fake leases with
relatives or close friends to avoid double taxation, he said.