Homebuyers must report capital sources to Tax Authority

housing

The requirement is part of a new Israeli law that will take effect on January 1.

The Israel Tax Authority is imposing an obligation to report sources of financing in real estate deals. The requirement is in the framework of the Minimizing Use of Cash Law, enacted six months ago, which goes into effect on January 1, 2019. It includes a number of restrictions, such a ban on all cash transactions of any kind amounting to over NIS 11,000. The law also states that in any transaction in land, including residential housing, the monetary resource must be reported. The duty applies to all land purchases: apartments, lots, stores, offices, etc., and any amount, regardless of whether the buyers are purchasing their first home or investors.

The report must be backed up by documentation showing the source of financing.

There is no connection between the reporting duty requiring foreign investors in Israel to report their financial resources and the current law, which is aimed at reducing the use of cash and which applies to all types of housing buyers.

Tax Authority real estate taxes division head Shay Aharonovich says that since the purchaser does not always know where he or she will get the money for the deal when it is signed, the Tax Authority will allow online reporting within six months of signing the deal on an Internet system to be established for this purpose.

"The Tax Authority will permit a few months for getting accustomed to the new law, after which failure to report financial resources will incur fines," Aharonovich said.

Published by Globes, Israel business news - en.globes.co.il - on November 28, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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