Knesset committee okays tax-free housing bill

MKs vote 10-6 in favor of draft law to grant VAT exemption for first time buyers, but panel to debate amendments

By ToI Staff 12 November 2014, 2:33 pm

Edit

Labor MK Stav Shaffir (L) argues with Yesh Atid parliament member Boaz Toporovsky during a Finance Committee meeting regarding the zero VAT law, at the Knesset on September 3, 2014. (photo credit: Noam Revkin Fenton/Flash90)

The Knesset Finance Committee on Wednesday approved a bill which would exempt new home buyers from paying value added tax.

The bill, put forward by Finance Minister Yair Lapid’s Yesh Atid party, seeks to grant certain qualified first-time buyers an exemption from Israel’s 18 percent value added tax.

The 16-member committee passed the bill, sending it to the Knesset plenum for a second and third vote to make it into law.

Yesh Atid managed to swing a deal to get the backing of the committee’s two Yisrael Beytenu MKs and the bill passed with 10 in favor and six opposed.

MKs Yaakov Litzman (United Torah Judaism, Yitzhak Cohen (Shas), Zahava Gal-on (Meretz), Arel Margalit and Stav Shaffir (Labor) and Ahmad Tibi (Ra’am-Ta’al) voted against the bill and called for a revote on certain amendments, The Marker reported.

Under the current formulation, buyers who served in the military or in civil service or who are disabled, qualify for the tax break for apartments under NIS 1.6 million.

Those who do not meet those qualifications are entitled to the tax break for apartments under NIS 950,000. Buyers must also be over the age of 35 and parents to at least one child in their custody. The couple must also not have owned an apartment since 1995.