Finance Minister Moshe Kahlon (Kulanu) unveiled the first segment of his plan to lower housing costs in Israel. Among the steps he plans to take: Increasing the number of apartments for sale, building apartments specifically for rent, increasing the amount of land available to developers at discount prices in return for building housing for the middle class, and increasing taxes on real estate purchased for investment.
The ideas Kahlon presented are a compendium of those that have been presented, and even attempted, in Israel over the past several years – with little effect on prices. But this time it's different, say supporters of Kahlon; besides Finance Minister, Kahlon is Israel's first-ever “housing czar,” having demanded and being given wide authority over housing, from community planning to sales of state land to providing benefits for builders and buyers.
Many of the changes are technical in nature, such as cutting the amount of time a homeowner selling their home in order to buy a new one to declare capital gains on the sale. The current 24 month period will be cut to 12 months, in order to encourage sellers to make the transactions faster, thus freeing up supplies of presumably cheaper homes more quickly. Other reforms promise to be more wide-ranging, such as one which will change the zoning on significant amounts of agricultural land, freeing those parcels up for home construction.
Speaking at a press conference where he introduced his reforms Wednesday, Kahlon said that the government was “finally taking responsibility and presenting unprecedented reforms, in a balanced manner that will increase the supply of available homes.”
Commenting on the reforms, Prime Minister Binyamin Netanyahu said that he and Kahlon “are committed to doing everything possible to lower the cost of housing for Israelis. We plan on tackling the three main issues involved – land, workers, and money – in order to accomplish this. We are definitely on a new and daring path that I believe will succeed.”