Cabinet okays tax break for homebuyers

Real estate professionals are skeptical the bill would make much of a difference.

homebuyers tax 88 224 (photo credit: Ariel Jerozolimski)
homebuyers tax 88 224
(photo credit: Ariel Jerozolimski)
In an apparent effort to make housing more affordable, cabinet ministers on Monday approved the proposed bill for legislation by MKs Gilad Erdan (Likud) and Ya'acov Margi (Shas) calling for tax benefits to be awarded to purchasers of a house or apartment. As proposed, those who purchase a house that costs up to NIS 800,000 and take out a mortgage up to $70,000 will be credited with a tax break upon completion of the purchase. "The bill will cause a revolution in the housing market and it will greatly aid young couples and middle-aged citizens in affording an apartment," Erdan said. "Let us keep in mind that the bill will be greatly effective in the peripheral areas in the country where dwellings cost around NIS 800,000." According to the Contractors Association, the monthly savings would total some NIS 500 - a substantial amount for young couples. "This is going to make it much easier for them to afford the mortgage over a number of years," the Association said. Real estate professionals were skeptical the bill would make much of a difference, however. "First of all, it won't really make a difference in Jerusalem, and it seems like a fairly small amount of money," one told The Jerusalem Post. "They seem to be really limiting it and its not a large amount in relation to what goes on in the real market - if you are trying to stimulate the home sector, i don't know if it will really make a difference." Accounting firm BDO-Ziv Heft said on Monday the law would bring Israel more in line with policies that are currently in use in many western countries, such as the US, Italy, Austria, Switzerland, Belgium, Ireland and Finland.