PM: Gov´t taking steps to decrease housing prices (JERUSALEM POST) By NADAV SHEMER 03/18/12)
JERUSALEM POST Articles-Index-Top
Gov´t passes Trajtenberg C´tee recommendations on housing, initiating
plan to build 187,000 units in next 5 years.
The Cabinet unanimously passed an amended version of the Trajtenberg
Report’s housing recommendations Sunday, which Prime Minister
Binyamin Netanyahu said would increase the availability of apartments
and lower prices.
This means the government has now approved all four chapters from the
report – which it issued in response to last summer’s protests over
the cost of living. The other three chapters dealt with taxation,
competition and social services.
Subject to Knesset approval, the Israel Land Administration will
market 187,000 new apartments throughout the country over the next
five years. Sixty percent will be located in the high-demand areas of
Tel Aviv, Jerusalem and central Israel - 40,000 of which will be for
“The more apartments there are, the greater will be the pressure to
lower apartment prices,” Netanyahu said at the start of the weekly
cabinet meeting. “This is what the Cabinet was dealing with even
before this report was presented and adopted, and continues to do so
Opposition MKs including Nahman Shai (Kadima) slammed Netanyahu for
removing earning power from the housing criteria in order to win
coalition partner Israel Beitenu’s support. “Without this criterion,
the government turns the Trajtenberg Report into a laughing stock,”
Among the other reforms approved Sunday, maximum rental assistance
for renters who are eligible for public housing will rise from NIS
1,750 to NIS 3,000 – at a cost to the state of NIS 800 million over
The property tax (arnona) ceiling for apartments that stand empty for
more than half a year will be doubled, with the aim of releasing more
than 15,000 apartments into the housing market each year. Apartments
deemed unfit for residence will be eligible for tax-exempt status for
only nine months, after which double property tax will also be levied.
Levies of up to 10% of the price of the apartments will be imposed on
contractors who win tenders but do not complete construction projects
within two years of receipt of the building permit.
In addition, the government approved an NIS 1.5 billion housing
package for new immigrants. The package includes monthly rental
assistance of up to NIS 1,250 per family of new immigrants, monthly
rental assistance of about NIS 3,000 for wheelchair-bound new
immigrants, and increased housing assistance for elderly immigrants.
New immigrant status will be recognized for 15 years from date of
aliyah, an increase from the current 10 years.
The Association of Contractors and Builders criticized the reforms in
a letter to ministers on Friday, claiming they would cause home
prices to rise 10%. The association said the reforms would impose a
heavy cost on developers who own land on which construction has not
yet begun – in contrast to the goal of speeding up construction and
“We are dealing with a credit crunch in real estate and small
businesses,” the letter said. “Levying a new tax will increase the
number of loans that contractors must take to finance construction,
worsening the credit crunch and resulting in a halt in housing
An amended version of the Trajtenberg Report’s chapter on taxation
came into effect January 1, increasing the rate of income tax for
high and middle-income earners, granting tax credits to father of
small and children, and paving the way the eventual removal of small
The chapter on competition, passed in December, promised the
establishment of a national public transport authority, and of
committees to supervise the price basic products. The chapter on
social services, passed in January, promised free education for
children aged 3-4 and free after-hours daycare for children aged 3-9.
(© 1995-2011, The Jerusalem Post 03/18/12)
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