Kahlon to re-legislate third apartment tax after High Court blow

Finance Minister Moshe Kahlon expressed disappointment about the High Court’s ruling, and said he’s sure that tens of thousands of young couples would like to buy homes feel the same way.

Kulanu leader Moshe Kahlon (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Kulanu leader Moshe Kahlon
The Knesset will make aattempt to pass a law taxing those who own three or more homes, Finance Minister Moshe Kahlon announced Monday, a day after the High Court of Justice struck down the law.
Coalition chairman David Bitan (Likud) and Knesset Finance Committee chairman Moshe Gafni (UTJ) agreed to hold meetings during the Knesset’s current recess, which ends in October, to prepare the bill for second and third readings.
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 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. At the time, Knesset Speaker Yuli Edelstein asked Gafni to hold a revote, but the Knesset speaker does not have the authority to tell chairmen how to conduct their committees, and Gafni refused, spurring the opposition to go to court.
Therefore, the court rolled back the legislative process to after the first reading, meaning before Gafni held the hasty discussion.
Kahlon expressed disappointment with the ruling, and said he’s sure that tens of thousands of young couples who would like to buy homes feel the same way.
The finance minister’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.
“We battled the wealthy, the banks and interest groups that don’t want housing prices to go down and [are] for young couples to stay far from buying homes,” Kahlon said. “I vow to continue fighting the investors. It does not make sense that one person will own six homes and another doesn’t even have one, and can’t dream of having one. We will continue fighting for young couples.”
The response to the High Court decision was not along party lines. Some opposition MKs said they support the measure, and only opposed the way it was passed, not its content, while some coalition lawmakers were glad the tax was canceled.
Zionist Union MK Miki Rosenthal, one of the petitioners, said the court’s decision was an important one, which exposed the “negligence in passing a third-apartment tax law like thieves in the night... leading to a bad law full of problems passing.”
According to Rosenthal, there is not enough in the version that passed to change the real estate market, and it will only raise rental prices.
“The idea behind the law was right, but the execution was a failure,” he stated.
“The new law must be a progressive tax....
If the law is brought back to the Finance Committee and discussed thoroughly and appropriately, we will support the law.”
Bayit Yehudi MK Bezalel Smotrich said that, while he normally opposes the court’s intervention in Knesset affairs, the ruling on this law is correct “even in conservative eyes.”
“It is not the court’s job to intervene in the content of the Knesset’s laws, and striking down a law because of its content is not legitimate. In this case, the court did not cancel the law because of its content, but because the rules of the democratic game were broken in the legislative process. In the separation of powers, it is the court’s job to ensure procedure is followed,” Smotrich said.
Knesset House Committee chairman Yoav Kisch (Likud) said: “This is a bad law which shouldn’t have been passed,” but at the same time, “it is not the High Court’s job to cancel laws or intervene in legislation.”