Tax on empty ‘ghost’ apartments to double

The Knesset Finance Committee approved Monday new regulations that will double the property tax on apartments that sit unused for most of the year.

The bill was submitted by Interior Minister Gideon Sa’ar and Finance Minister Yair Lapid.

The regulations will apply to apartments that have sat empty for nine consecutive months. The law will be in effect for two years, during which times authorities will track the impact on housing prices and supply.

Entire swaths of neighborhoods in Jerusalem and other cities are largely empty except for certain holidays, as most of the apartments are owned by wealthy foreigners as vacation homes.

In addition to emptying cities of residents and the economic and social benefits they bring with them, the phenomenon makes urban housing harder to find.

Under the new rules, municipal governments will be allowed to grant exemptions in some cases if there are extenuating circumstances.

According to the statement, the goal of the measure is to encourage absentee owners to rent out the apartments.

The measure will “help protect the urban fabric,” said Sa’ar.

Lapid called the regulations “another meaningful step that will increase the supply of apartments in Israel.”

In March 2012, the Trajtenberg Committee recommended that apartments that stand empty for over six months a year be charged double the property tax. A government statement said the move was likely to release over 15,000 apartments into the housing market.