Tivuch Ida

Professional agency with a personal touch


Rental thoughts to munch on


When I think of rentals, many ideas are conjured including cost, size, location etc.
Rental costs vary in cities. Tel Aviv and Jerusalem for example have high rental fees comparatively to Beit Shemesh,Kiryat Gat, or Beer Sheva. In these areas one can find decent rentals .
When looking at rentals, one must pay attention to many pointers .One does not want to rent a home that has damp issues, or requires work that has not been done.
Even better, beware of homeowners who promise to deal with issues that have not been dealt with . If you came to look at the apartment and serious issues have not been
dealt with BEFORE viewing , you will want to inspect it AGAIN before signing a contract.
Renters should take all costs into consideration to verify that the apartment they
are interested in, they can afford and not THINK they can afford it.
For example, this 6 square meter kiosk rents for 12,500 shekels a month.
Can you afford the rent? The municipal tax? Any related maintenance fees?
This does not include water, electricity, gas etc.
Got any questions, feel free to contact me. 🙂

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Leumi hi tech loans


Own a small business or want to open a small business? The European Investment Fund and Bank Leumi signed an agreement allowing higher lending to innovative small and medium size businesses .Bank Leumi could provide finance of $100 million to technology companies in Israel . If hi -tech is no longer a leader in the Israeli economic growth maybe this could give it a boost.

 

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MK Orly Levi-Abekasis has proposed a bill lowering the mortgage equity requirement from 25% to 10%.


The Ministry of Finance is promoting a solution that will enable young couples to get a mortgage amounting to a higher percentage of the price, Minister of Finance Moshe Kahlon said at a meeting of the Knesset State Control Committee devoted to the housing crisis. Answering a question whether he would remove equity requirements on mortgages for young couples, Kahlon said, “We must deal with this, it’s on the agenda now, and we’ll provide a differential solution for disadvantaged people.”

Kahlon’s remarks following the proposal of a bill by MK Orly Levi-Abekasis (Yisrael Beitenu) for reducing the equity required in mortgages for young couples from 25% of the property price to 10%. Levi-Abekasis asserts that the Ministry of Finance and the Bank of Israel are ignoring young couples who currently must raise the required equity through high-risk loans at high interest, without their repayment capabilities being examined. Sources close to Levi-Abekasis said that Kahlon himself had said that he took a mortgage amounting to 95% of the apartment price in order to buy his first apartment. Until new Bank of Israel restrictions were imposed three years ago, mortgages of up to 95% of the purchase price could be obtained.

Following criticism by economists, who argued that increasing the financing element would cause higher apartment prices, Levi-Abekasis agreed to restrict the larger mortgages to projects in which the price of apartments was independent of demand, and was not set on the free market, such as the buyer fixed price plan. This proposal, however, is also arousing great opposition from the professional echelon in the Ministry of Finance, who are claiming that it would set a dangerous precedent. In today’s discussion, Levi-Abekasis said that the current situation was impossible for many young couples.

Sophie’s Choice

“The Ministry of Finance, the Bank of Israel, and the Ministry of Construction and Housing are ignoring the entire issue of young couples unable to buy an apartment. Many of them can’t raise the equity. Even well-off families are unable to help all their children. It’s like Sophie having to choose which child she should help. What does the state tell them? ‘If there’s no apartment, or you can’t get the equity, then rent.’

“The problem is that one day, there will be thousands of pensioners whose pensions aren’t enough to sustain them. The state is now telling those people to go on renting. We’ll have homeless pensioners here, and what will they tell them then? That they’ll have public housing?” Levi-Abekasis added, “We used to have 95% financing for mortgages. Why shouldn’t we have it now? People who don’t have money borrow from their parents and friends, or from the gray market. The interest on those loans is murderous, and we’re putting them into a trap.”

Published by Globes [online], Israel business news – www.globes-online.com – on October 27, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015


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Israel Railways begins laying Jerusalem-Tel Aviv tracks


By Hedy Cohen

GLOBES

Israel Railways reached a major landmark in the construction of the high speed railway to Jerusalem: the first line to run on electricity. The company began laying tracks on the western section of the line, in the Ayalon Valley region.

The project is estimated to cost about NIS 7 billion, including the construction of two 5-kilometer tracks from Tel Aviv’s Haganah Statin to the entrance of Jerusalem, near the International Convention Center, as well as five tunnels, totaling 20 kilometers, and eight bridges.

Israel Railways also announced Monday that work was completed on the final section of the Negev line between Ashkelon beersheba.  The project connected the rail from Ashkelon to the Goral Junction and to the existing railway in Beersheba, as well as the national rail network.

“The Negev railway is first and foremost a Zionist project,” Israel Railways CEO Boaz Tzafrir said. “The direct line between Ashkelon to Beersheba, through Sderot, Netivot and Ofakin, will boost employment in southern Israel, attract young couples to the region and increase the quality of life of hundreds of thousands of southern Israelis.”

“Alongside that project, we recently began laying the new tracks on the high speed railway to Jerusalem, where the development work has been going at an accelerated pace,” he said. “It’s a vision that is now becoming a reality.”


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Treasury plans to raise taxes on homes bought for investment


By Amiran Barkat

and Drior Marmor 

Globes

The Finance Ministry is recommending to Finance Minister-designate Moshe Kahlon a 20-percent tax on purchases of housing for investment purposes. Kahalon has already declared he intends to introduce a steep tax hike within the framework of the coalition agreement his Kulanu partyy signed on Wednesday with the Likud. 

The agreement does not specify the rate of the new tax, which applies to purchases of apartments by people who do not intend to live in them. Kahlon spoke of raising the purchase tax to 25%, but he would be satisfied with 20%, people familiar with the matter told Globes.

An internal probe by the Finance ministry Budget Department showed that a 20% tax would e optimal for state tax revenues, while a higher rate would reduce tax revenues due to a sharp drop in the number of deals.

The measure is quite dramatic, amounting to hundreds of thousands of shekels for an average apartment. The current tax on housing for nonresidential purposes is graduated : 5% on the first bracket and up to 10% on the fifth and highest bracket of NIS 15 million or more. A simulation conducted for an apartment costing NI 2m. shows that the recommendation quadruples the purchase tax on an investor from NIS  108,000 at present to NIS 400,000, while a person buying the same apartment for residential purposes would pay NIS 20,000.

This tax hike will cause an earthquake in the housing market, a quarter of which is composed of those purchasing housing for investment purposes, according to the most conservative estimates. 


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Amdocs Israel seeks new local headquarters By Shomit Tsur


Globes

Technology company Amdocs Ltd., which occupies a giant 75,000- square-meter complex at the Ra’anana Junction, on Sunday notified its employees that it is looking for a new location in the central region. The company’s lease with REIT 1 Ltd., the owner of the company’s current site, expires at the end of 2019.

In its announcement to the employees, company management explained the planned move by saying that it wished to improve their working environment. Among the alternatives under consideration by the company are the purchase of a new office building to be constructed for it, renting a new office building or renovation and adaptation of the existing complex to the company’s needs.For this purpose, Amdocs has established a task force, which has already begun looking for locations.

“The search will be in the central and Sharon regions,” Amdocs management wrote in its letter to the employees.”The main guiding criteria are a better experience for the employees, including better transportation, suitable facilities in the area, business, cost and other operation considerations.”

Assuming that Amdocs does move its offices from the current location in Ra’anana, REIT1 will have to find a new large tenant. This large size of the areas to be vacated will make this a difficult task. Amdocs Israel has been in the hi-tech park at the Ra’anana Junction since 1996 and currently occupies 75,000 sq.m., not including parking, out  of 82,000 sq.m.  in the entire complex.

One of the other tenants in the office complex is Microsoft. According to REIT1’s  reports, Amdocs paid NIS 38.2 million in 2014 for its facilities in the Ra’anana site. REIT1 owns 60 percent of the compound, with the rest owned by S.A.N. Centers, Ganai Shefa Building & Investment and Sunflower Sustainable Investments Ltd.

Amdocs Israel is a subsidiary of the global Amdocs company and has 4,500 employees, mostly in the Ra’anana center, with the rest in other development centers in Haifa, Sderot and Nazareth.

“The search will be in the central and Sharon regions,”


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Gasoline prices to fall sharply at end of month


By Hedy Cohen

Globes

Gasoline prices will fall by about NIS 0.55 to NIS 0.60 per liter at the end of December, according to energy-market sources. The fall follows the 40 percent plunge in oil prices on world markets over the past few months.

The price of a liter of 95 -octane gasoline at self-service pumps is currently NIS 6.90, after falling by NIS 0.15 at the beginning of December and by NIS 0.27 at the beginning of November.The pice of a liter of 95-octane gasoline at sef-service pumkps will be about NIS 6.30 from January 1. Fuel prices in Israel are now at their lowest in more than four years.

However, the price of oil on global markets is not responsible for 100% of the price at Israeli pumps. The price of oil on the Lavera international oil market in France, four days before the start of a new month, is responsible for only 35% for the price set on the first of each month. The biggest component in the price is the excise tax imposed by the Finance Ministry, which comprises 41% of the price we pay for gasoline, diesel and other fuels.


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Shekel Jumps versus dollar


By Steven Scheer

The shekel strengthened by 1.2 percent against the dollar on Tuesday in what might be the start of a correction after the greenback failed to break through the NIS 4 level.

The shekel had shed 2.5%in the past week following the collapse of the governing coalition after just 20 months and the setting of a new election in March.

It has lost about 16% of its value versus the dollar since July, depressed by a combination of weakening Israeli growth, interest-rate cuts and general dollar strength.

“The [ exchange rate] has moved a long way in a short period of time,” said a dealer at a large Israeli bank. “Dollar-shekel was overbought, and fundamentals agree it was over bought, so we are having a correction.”

The Bank of Israel fixed the shekel at 3.9440 per dollar – its most robust level since December 1 – from 3.9910 on Monday. After the fixing, it gained to 3.926

Dealers said the dollar, which surged from below NIS 3.4 in July to touch a 27 – month high on Monday, had tried but failed to break above the NIS 4 level.The dollar has not been worth more than NIS 4 since September 2012.


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Raise minimum wage


By Niv Elis

The minimum wage is too low, the Histadrut labor federation told Finance Minster Yair Lapid on Monday.

“Raising the minimum wage is an indispensable step that must be taken in order to reduce social gaps in Israel, ” Histadrut Chairman Avi Nissan koren said in a letter. The fact that working families could remain poor was “unthinkable,” he said.

Economists differ on the effect of minimum wage increases. Some argue that raising the cost of labor will leave businesses with less money, and force them to fire staff. Others argue that the employment effects will not show up beyond a certain level, and that giving workers more money to spend will help the overall economy. More money means more customers, which means greater revenue for the employers who hire workers. Others still argue that when wages are too low, workers may not find it worthwhile to toil all day. According to the Histadrut, the current adult minimum wage of NIS 4,300 a month (NIS 23.12 an hour) is not sufficient to help people escape poverty.

In 2011, the poverty line for a couple was set at NIS 4,001 meaning that one minimum-wage earner would put the coule above the poverty line, according to the Myers JDC Brookdale Institute. For a family with three children and two adults, however, the line was at NIS 7,502 meaning both parents would need to work to be above teh poverty line.

One policy option, which is already in effect in Israel and that the Bank of Israel favors expanding, is the earned income tax credit, or negative income tax. That policy adds to the take-home pay low-wage workers make, costing the employers nothing and giving people a greater incentive to work. The money, of course, comes from taxpayers via the state budget.

Though, the overall level of welfare, employment and child benefits puts a big dent in Israeli poverty, the country’s poverty levels are still among the highest in the Western world.
When it comes to the real minimum wage workers earn, which takes prices into account, Israel is smack in the middle of the OECD, with the average worker earning $5.03 an hour in 2013. On the low end of the spectrum, Mexicans made just $0.80 an hour, while in Luxembourg they earned $10.80 . American minimum wage earners got $7.30 an average that year.

In Israel, the figure has barely budged in more than a decade.

When compared to the median and average wages in the OECD countries, Israel is higher on the list, comping in 6th or 7th place of 24, respectively. that means that the workers right in the middle are making close to the minimum wage.

Minimum 30, an advocacy group for increasing the minimum wage from NIS 23.12 and hour to NIS 30, applauded the Histadrut’s letter, but said that small changes would not be enough.

“We heard about the finance minister’s intention to increase minimum wage by NIS 200 a month. We stress that only a minimum wage of NIS 30 an hour will rescue families from poverty,” the group said.