Taxes on Israeli homes said to be 75% above OECD average

“Israel’s dairy market is run on the Soviet model," Jerusalem Institute for Market Studies researcher says.

July 21, 2011 22:07
1 minute read.
Jerusalem property

property 521. (photo credit: Marc Israel Sellem)

Israeli taxes on homes are 75 percent above the OECD average, the Jerusalem Institute for Market Studies reported in a study Thursday.

The government’s housing and dairy products are failures, and no market failures are involved, the position paper said. Politicians blame the market to cover their own shortcomings, it said.

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The report cited a World Bank study that ranks Israel No. 121 in the world for efficiency in obtaining building permits and No. 147 for efficiency in obtaining property rights after a real-estate purchase.

These procedures take four times longer in Israel compared with the OECD average, the report said.

The said there was a heavy tax burden on real estate, which generates 9.4% of the government’s tax revenues, compared with the OECD average of 5.4%.

“When government measures fail to achieve their desired results, there is a tendency to blame the market,” Jerusalem Institute for Market Studies researcher Yarden Gazit said in the report. “But in the case of the housing market, the failure is a government failure from A to Z.”

Government policy is responsible for the price rises for basic food products, she said, adding: “Israel’s dairy market is run on the Soviet model.

The Israel Dairy Board sets how much milk will be produced, by whom and the price it will be sold to dairies. Imports and free competition are banned by the Dairy Market Planning Law.”

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