An accountant calculator taxes 370.
(photo credit: Ivan Alvarado / Reuters)
The Knesset Finance Committee has approved doubling property taxes on Israeli
properties owned by foreigners. It is a governmental step that ostensibly
punishes overseas Jews who have the gall to buy luxury vacation homes in
Actually, it is a political gimmick to detract attention for the
appalling decades-old failure of government housing policies by focusing the
spotlight on fellow Jews who decided to invest their money in Israel rather than
taking their families on vacations to Florida, the South of France, or
Finance Minister Yair Lapid praised the tax approval, claiming it
would help solve the domestic housing crisis. He is wrong and
Jews with a passionate love of Israel are being treated by
our politicians as if they are the evil owners of “ghost apartments.” The very
image depicts sinister money-grabbers rather than appreciation for those who
have invested much of their hard-earned money into Israel.
individuals would certainly be able to buy similar properties in Europe and
America at far lower prices and not be burdened with the already high taxes,
including municipal taxes (arnona), which will increase further as a penalty to
force them to sell their property and flee our shores. How can Interior Minister
Gideon Sa’ar possibly imagine that wealthy overseas owners who bought their
expensive vacation properties in prime Israeli locations, upgraded them to
levels not seen in the average Israeli home, and use them for their much needed
R&R, would make them available for long-term rent to “young residents who
otherwise cannot afford presently cost-prohibitive rents” according to Daniel K.
Eisenbud’s article (“Finance Committee approves doubling property taxes,”
Jerusalem Post, 10/12/13). The concept is ridiculous.
Champion of this
misguided cause appears to be Ofer Berkowitz, Jerusalem’s deputy mayor, from the
Hitorerut (“awakening”) list. He should rename his party “Jerusalem Dreaming in
He said, “Expensive housing impairs the ability of young
people to stay in Jerusalem.” How does a NIS 3 million property owned by a
London or New York family prevent a young couple with a budget, including
mortgage, of NIS 1.5m. from getting into the local property market? Does
Berkowitz really think that this property would sell to the young people he is
trying to help at the price they can afford, even if he succeeds in forcing the
overseas Jews to sell? It’s absurd. May I remind Berkowitz, and other mayors of
towns with a proportion of vacation homes, that they charge excessive arnona in
locations where overseas owners have their vacation properties. As such, the
overseas owners contribute far more than the average population in their towns
and cities while being less of a cost burden on the municipal social welfare,
educational, and other resources and services.
It is not the investment
of overseas property buyers in vacation homes that is at the heart of the
domestic housing market defect. It is the failed policies of Israeli
governments, and punishing our overseas friends and relatives is not going to
correct that failure.
Governments have not succeeded in cutting the
Gordian knot of bureaucratic mismanagement. They have not made good on their
promise to release large plots of state land for development of affordable
housing. Neither have they developed a plan for the construction of rental
properties. They have failed to order the construction of apartments pegged to a
price that is within the financial reach of the population.
government remedy would be to reduce the growing cost of consumer goods and food
In 2004, Israeli food prices were 10% below the OECD average. If
the government would regulate food prices it would allow young people to have
that extra money to get into the housing market.
Our politicians should
not play a false narrative by pointing envious fingers of blame at our overseas
friends and make them feel guilty for the poor state of Israelis’ property
crisis. Instead, they should address the shortcomings and solve the problem with
the tools at their disposal that does not punish and drive away our wealthy
friends from abroad.The writer is the author of
Israel Reclaiming the
Narrative. www.israelnarrative.com. He is also the co-owner of Netanya
Real Estate. www.netanyarealestate.com