The Ministry of Housing and Construction has launched an advertising campaign for its target price program, and has revealed where the new tenders will be published. It has also been ruled that purchasing an apartment in the target price framework will be subject to obtaining a Housing Ministry eligibility certificate, but the ministry has not yet issued these certificates; they will be issued only after the target price tenders are actually published and the winning developers or contractors are announced.
After a long period of uncertainty about the location of the new tenders, the ministry has published the cities for which the first tenders will be published during the coming year: Beit Shemesh, Gedera, Herzliya, Yokneam, Jerusalem, Modi'in-Maccabim-Reut, Kiryat Motzkin, Kiryat Ata, Rosh HaAyin, and Ramle. The ministry, however, has not yet stated exactly where the projects will be built in each city, or the number of housing units.
Last week, Minister of Housing Uri Ariel promised to publish tenders on a large scale during the coming year. "After the Knesset passes 0% VAT, we'll publish tenders for between 12,000 and 15,000 housing units during the coming year," he said.
As part of the target price program, the Housing Ministry undertook to market 11,000 housing units in 2015, in addition to 6,000 units in 2014. The plan includes issuing tenders for 66,000 housing units by 2019.
The target price program stipulates that the Housing Ministry will publish tenders designated exclusively for contractors and developers, in which the tender winners undertake to build 80% of the apartments in the project at a discount of 20% on the market price in that region. The tender winner can sell the remaining 20% of the apartments at market prices. The winning bid in the tender will be the highest bid for buying the land that conforms to the tender terms for the reduced price.
Someone purchasing an apartment through the target price program cannot sell it for five years, but can rent it out. The program also stipulates that the projects to be constructed in the framework of this program must meet the Housing Ministry specification.
The length of time between the publication of the first tenders and the first actual apartment sales is expected to be about 18 months. Those purchasing an apartment in the framework of the VAT benefit will not be eligible to buy an apartment in the framework of the target price program, and vice versa.
Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2014
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