Jerusalem municipality doubles tax on empty homes

Mishkanot Ha'Uma, Jerusalem

Apartments unused for nine months of the year will be charged double tax. Tel Aviv plans to follow suit.

Starting in 2016, Jerusalem's municipal property tax rate for apartments remaining empty nine or more months of the year will be doubled to NIS 223.56 per sq.m. per year. This means that municipal property tax on an empty NIS 100-sq.m. apartment will be NIS 22,356, or NIS 3,726 every two months.

According to Jerusalem municipality figures, there are 9,000 apartments in Jerusalem that are empty by the municipality's definition: "an apartment that is unused at least nine months of the year." The municipality explains that apartments are defined as empty according to an examination of their electricity and/or water bills.

The Jerusalem municipality added that the new charge became possible when the Minister of Finance and the Interior approved its request to double the municipal property tax on empty apartments in Jerusalem, and authorized it to collect the doubled tax.

"Doubling the municipal property tax on empty apartments is in the framework of the model initiated by Mayor Nir Barkat in order to encourage landlords to lease their apartments, thereby increasing the supply of housing in the city for young couples and families. The money from the double tax on empty apartments will be used to promote cheap housing for young couples and families," the municipality stated.

The initiative is not new; the Jerusalem City Council approved it five years ago. At the same time, Barkat asked foreign residents owning empty apartments in the city to lease their apartments to young people there.

"Doubling the municipal property tax on empty apartments is an important tool for adding thousands of apartments for young families in Jerusalem," Barkat explained. "Young people are the oxygen of Jerusalem. Adding thousands of empty apartments to the market will dramatically increase the supply of rental apartments for young people, and cause a decrease in rents in the city."

The Tel Aviv municipality previously announced that it would put the same idea of double taxation on empty apartments into operation, based on the same criteria. Double municipal property tax in Tel Aviv amounts to NIS 219.14 per sq.m. per year.

Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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Mishkanot Ha'Uma, Jerusalem
Mishkanot Ha'Uma, Jerusalem
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