(photo credit: OHAD TZVEIGENBERG/POOL)
Finance Minister Moshe Kahlon’s policy of taxing people who own three or more homes has a greater chance of being revived after its cancellation by the High Court now that Zionist Union announced its conditional support from the opposition on Sunday.
The High Court of Justice overturned the new tax earlier this month, saying that the Knesset rushed the legislative process and did not give MKs enough time to study its details before voting.
Opinions on whether the tax should be reinstated or not did not fall according to party lines, with some in the coalition saying it was a bad idea in the first place, and many in the opposition voicing support.
Zionist Union faction chairwoman Merav Michaeli announced her party’s support for legislating the new tax again, with some changes.
The faction has asked that the new version of the bill include an annual tax on owners of three or more homes of 0.5% on the total value above NIS 5 million of the properties, or over NIS 7.5m. if the owner does not have pension savings.
In addition, Zionist Union says the tax should go into effect in 2019, so that people have time to sell their third home, rather than raise the rent on their properties in order to cover for the higher taxes.
Michaeli said: “If and when there is an appropriate discussion of the third-home tax in the Knesset Finance Committee, we in the Zionist Union will make sure the law is truly social and fair... through progressive tax and deferring the law’s implementation.”
Kahlon’s logic behind the law was that it would discourage people from buying multiple properties as an investment, and free up more apartments for first time homeowners, since the supply of available homes to buy does not meet the current demand.
The Finance Committee passed the third-apartment tax law in tandem with the budget in December, as part of a long, overnight committee meeting that included a noodle kugel break but not a proper discussion of the new tax and its ramifications, according to the High Court.
The judiciary annulled the law for procedural reasons, in response to a petition by opposition parties, submitted after lawmakers were shown only its final draft an hour before having to vote on it.