Buy 1st-Time Apartment, Save VAT

As housing prices continue to rise compared to average income, MKs propose: Exemption from VAT for first-time buyers on the periphery.

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Hillel Fendel , | updated: 2:13 PM

New housing
New housing

As housing prices continue to rise compared to average income, MKs propose: Exemption from VAT for first-time buyers on the periphery.

A group of Knesset Members is initiating a move that would make it easier for young couples to purchase apartments. Specifically, first-time buyers who purchase an apartment in a peripheral area of Israel would be exempt from VAT – which currently stands at 16%.  Only apartments costing up to 600,000 shekels ($161,000) would be exempt, according to the proposal.

The initiative has been announced on the backdrop of recently-released statistics showing that the ratio of apartment prices to average income has risen significantly over the past year.

The idea is part of the MKs’ newly-formed Knesset lobby to find solutions for young couples’ housing problems. As of now, the forum numbers MKs Miri Regev (Likud), Yaakov Edry (Likud), Orli Levy (Israel Our Home), Daniel Ben-Simon (Labor), and Dov Hanin (Hadash).

MK Regev says that the Finance Ministry has been asked to consider either the VAT exemption, or “to restore the location grants given to young couples, thus increasing the aid given them.”

Regev explained, “The government must act immediately and invest all the necessary resources in order to help every citizen obtain suitable housing, grant housing-purchase subsidies for young couples and others who wish to buy in the periphery. We can’t have young couples returning to live with their parents – or set up tents for the homeless – because they can’t afford to buy or rent.”



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