The maximum price for which a VAT exemption will be granted to those who have not served in the Israel Defense Forces (IDF) or civilian national service, it is believed, will change from NIS 600,000, as the Ministry of Finance announced yesterday, to a larger amount. This follows the stubborn objections of Minister of Construction and Housing Uri Ariel, and comments by the Minister of Justice, and the Attorney General that if there are insufficient new apartments in this price range then the price will change.
“The compromise presented by the Ministry of Finance for the VAT criteria is unacceptable,” said Minister of Construction and Housing Uri Ariel at the Knesset Finance Committee meeting on the housing crisis. “The compromise needs to be more egalitarian. I repeat: there will be no NIS 600,000 limit for people who did not serve, it won’t pass. Why? Because there are no such apartments, maybe a few, and, in addition, the Finance Committee, in my opinion, will not allow it.” Ariel’s comment comes after he attacked the compromise as unrealistic yesterday, following its announcement by the Ministry of Finance. Ariel also said he would be speaking to the Attorney General to emphasize that there are no new apartments for NIS 600,000 on the market.
It appears that Minister of Justice Tzipi Livni is also demanding explanations about the compromise. Livni instructed Ministry of Justice Land Appraisals Council chairperson Tal Aldrussi to check whether the data presented to the Ministry of Justice in the discussions of the zero-VAT agreement are correct and accurately reflect the reality in the market.
According to Livni, if the data are not in line with reality, “There will be no escaping changing the relevant clause.” She further said that “Encouraging and rewarding young people who bettered their country by serving in the IDF or national civilian service, is a worthy process, and is our duty. If it becomes clear that the figures presented to the Ministry of Justice, based upon which the Attorney General made his recommendation to the government, are inaccurate, and are not in line with reality, there will be no choice but to adjust the amount at which the benefit is given, without harming the benefits given those who served their country.”
Published by Globes [online], Israel business news – www.globes-online.com – on May 12, 2014
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