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Housing cabinet approves plans to boost housing supply


By Niv Elis

The housing cabinet on Monday approved two plans to boost housing supply and bring down the cost of apartments, particularly for young couples and first-time buyers.

“Our younger generation has rights, not just obligations, ” Finance Minister Moshe Kahlon said. “A roof over your head is a basic right, and it’s our duty to supple one.”

The plans will produce a “massive supply” of apartments aimed at young couples, both in the periphery and high-demand areas, he said.

The first of the plans will broaden a mechanism for doling out subsidized state land to developers who promise the lowest cost for their units. Young couples who are first-time buyers will have first dibs on the apartments, on condition that they do not sell them for five years.

A tenth of the apartments wil lalso be designated for local residents. The land subsidies can go as high as 80 percent of the appraised value of the land, benchmarked from the beginning of June.

In areas where the scheme is expected to have less of an impact, the state will also offer development subsidies of NIS 40,000 to 60,000. The Finance Ministry estimated the grants and subsidies of the whole program would amount to NIS 200,000 on average per apartment unit.

The second plan will allow construction projects that are already in the works to expand by 20% without needing additional approvals. The temporary order, which will apply to buildings that do not yet have a frame built, allows developers to get on=the=spot approval to add more units, on condition that half those units are small apartments (under 75 square meters) appropriate for young couples, and none of the units exceeds 150 sq.m.

The plan is intended to make a quick push for new apartments using existing infrastructure, thus sidestepping the lengthy and costly approval process and need to build further infrastructure to accommodate new buildings.

Local authorities will exact a fee from increased building that they can use toward developing public spaces.

Overall, the Finance Ministry expects its initiatives to get 82,000 units into the planning process by the end of 2015, 45,000 of which will be on state land. The Bank of Israel has estimated that the country needs roughly 40,000 to 45,000 construction starts each year to meet the growing demand for housing.

The plans must still be approved by the Knesset before becoming law.

 


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Ministerial C’tee approves 0% VAT on new homes


The bill now moves on to the Knesset Finance Committee.

The changes already made include raising the eligibility threshold for applicants who did not serve in the IDF or National Service from NIS 600,000 to NIS 950,000, and eliminating the eligibility document. The revised bill also sets September 1 for the law to come into effect.

The bill is also opposed by Bank of Israel Governor Dr. Karnit Flug who fears that much of the savings in 0% VAT will not find its way into the buyer’s pockets.

Published by Globes [online], Israel business news – www.globes-online.com – on June 16, 2014

* The big question is, who will it benefit?


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Cabinet unanimously approves zero VAT plan


The goal is for the Knesset to approve the zero VAT bill for first-time homebuyers by September 1.

The cabinet today unanimously approved the zero VAT bill for first-time homebuyers of new apartments. The bill now goes to the Knesset Finance Committee and to the Knesset plenum. The goal is for the Knesset to approve the bill by September 1.

Published by Globes [online], Israel business news – www.globes-online.com – on June 22, 2014