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Young Couples May Get VAT Break for First Home

Finance Minister will propose the tax break – that will cost the treasury about 2B shekels – on Monday.
By Gil Ronen
First Publish: 3/18/2014, 9:13 AM

Apartment interior (file)
Apartment interior (file)
Flash 90

Finance Minister Yair Lapid will present on Monday a proposal to the Ministerial Committee on Housing, according to which VAT tax will be waived for young couples who are purchasing their first home. According to Yediot Aharonot, in order to be eligible for the discount, at least one member of the couple must have completed military service or alternative national service.

VAT is currently at 18%.

A couple that purchases its first apartment with this discount will not be allowed to sell it for the next five years. This measure is intended to prevent couples from buying apartments for the purpose of trading in them.

The newspaper claims that the Finance Minister decided to go ahead with the plan after extended discussions with the Finance Ministry's senior professional staff, which opposed it. It is estimated that the tax break will cost the state treasury about 2 billion shekels.

Assuming the Cabinet Committee for Housing approves the step, the legal process for turning it into a Knesset bill will probably take six months.

Yediot Aharonot is seen as a solid supporter of Lapid, who used to write columns for it on a regular basis.