Lapid vows to pass 0 VAT law in October, fast-track housing law approved

Housing Minister Ariel suggests special Knesset recess session will take up 0 VAT law.

July 30, 2014 16:19
2 minute read.
As well as their regular classes, the stables now offer equestrian Tai Chi and Qi Gong.

Gilo 370. (photo credit: reuters)


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Reeling from parliamentary moves that prevented his signature housing law from passing on schedule, Finance Minister Yair Lapid on Wednesday vowed to push it through at the start of the next Knesset session in October.

Time was of the essence for Lapid’s “zero-VAT bill,” which would exempt some young couples from paying the 18 percent value-added tax on their first home purchase. Since its announcement in March, the housing market has choked up, as couples hoping to save on their purchase postponed their buying until September, when the law was slated to go into effect.

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Members of the Knesset Finance Committee threw the bill into a tangled web of parliamentary procedure on Tuesday, preventing it from passing by the end of the Knesset’s session on Wednesday and taking the September deadline off the table.

“The equality of burden law also took a year to pass, but we passed it and all those attempts [to block it] didn’t help,” Lapid said.

In an interview with Channel 2, Construction and Housing Minister Uri Ariel said that the delay was bad for the citizens of Israel, and that he would push to pass it in a special Knesset session during the summer recess.

The law has been criticized as discriminatory for offering significantly greater benefits to former IDF soldiers and national service participants. The Knesset legal adviser has warned that the bill, if passed, would not stand up to a Supreme Court challenge. Business leaders and economists, including top government advisers, have also panned the bill as ineffective, costly, and populist.

Yet, while the controversial VAT bill dominated discussion, another policy attempting to tackle the inflated price of housing – which has roughly doubled since 2007 – passed into law on Tuesday.

The law would create a Committee for the Preferred Housing Program, abbreviated in Hebrew as “vatmal,” which for four years will help large, pre-approved housing projects avoid the bureaucratic maze involved in construction.

The committee is set to handle the procedural hurdles for housing projects that include more than 750 units designated by the housing cabinet as “national housing projects.” Any such projects will have to designate 30 percent of the units for long-term rental, half of which will be under price supervision and half of which will sold at market prices.

Hadash MK Dov Henin criticized the plan, saying it trampled on important environmental regulations, did not create affordable housing, and had no mechanism to ensure that construction companies followed through on their building plans.

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