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June 17, 2014 10:36 am

Knesset Committee Approves Bill to Slash VAT for Home Buyers

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Israeli knesset (parliament). Photo: Chris Yunker.

Arutz Sheva – The Ministerial Law Committee on Monday approved for legislation a law that, if passed, would exempt first-time home buyers who match criteria set by the Finance Ministry from paying value-added tax (VAT) on home purchases. The law, proposed by Finance Minister Yair Lapid, has been a matter of great controversy in recent months, as critics accused Lapid of trying to prevent significant segments of the population, including haredi and Arab Israelis, from getting the benefit.

According to the final version of the law, the exemption will apply to homes valued at NIS 1.6 million or less, with the value based on a complicated formula that takes into account recent sales and sets an average price for a neighborhood. Only those who have served at least 18 months in the IDF will be eligible for the benefit.

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