At the most recent meeting of heads of coalition parties, Minister of Finance Moshe Kahlon, who heads the Kulanu party, made clear that he was not prepared to compromise on his proposed tax on owners of three or more homes, Channel 2 News reports.
"I don't like much of the legislation you pass. If you start to break commitments, then I'll do the same, and the whole business will fall apart," Kahlon told the other ministers. In other words, as far as the minister of finance is concerned, without the tax there will be no coalition. Kahlon declared that he was not prepared to make significant changes, despite the objections of senior members of the Likud party.
Meanwhile, Kahlon has been working hard on winning opposition support, and has succeeded in creating a "safety net". Meretz leader Zehava Galon promised him that she and her party would support the law, and several Zionist Union members of Knesset, among them Shelly Yachimovich, have expressed support. This means that Kahlon will be able to legislate the tax without substantial changes or concessions.
Two weeks ago, the Minister of Finance was surprised to hear Prime Minister Benjamin Netanyahu state in an interview with Channel 2 that he was in a conflict of interests over Kahlon's tax on third homes and that therefore it was not certain that he would vote for it.
Kahlon said in response, "Members of the coalition will have to choose whether they support the decision that helps young couples and the middle class or whether they will join Yair Lapid in protecting the richest 0.1%.
"The aim of the third home taxation plan is to free up homes and raise supply. We have already chosen: we are on the side of the young couples," Kahlon wrote in a post on his Facebook page.
Under the new legislation, anyone who owns three homes will pay an annual tax of NIS 10,000. The tax on owners of four homes will be NIS 22,000, and on owners of five homes it will be NIS 37,000. According to Ministry of Finance figures, some 54,000 households in Israel own three or more homes. 21 families own more than 20 homes. The average age of the multi-home owners is 56, and their average income is NIS 46,000, three times the general average. The tax will apply to about 80,000 homes.
Netanyahu's remarks about being in a conflict of interests were criticized by Minister of Justice Ayelet Shaked, who said, "Ministers and members of Knesset are not in conflicts of interests concerning general and universally applicable matters such as taxation. I shall ask the Attorney General to clarify this."
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2016
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