Housing purchase tax reduced

The treasury department announced a change in the purchase tax rate to allow the tax exemption on the purchase of a home for the first 1,350,000 NIS.  Although the move is said to benefit at least 8000 couples who will purchase this year rising prices continue to strain the new buyer who will have to come up with a 40% cash downpayment on that amount.

The 40% guideline is in effect to try to restrain the rise in housing prices which rose 17.3% since 2008 with the average four-room apartment rising in cost 29% within that same time period according to the government assessor’s office’s statement published last Monday.

Some areas have seemed to have capped that were on a steep rise, such as central and north Tel Aviv and central Jerusalem, but prices in the relatively more affordable areas of Maale Adumim, Modiin, Beer Sheva and other outlying districts are now seeing more rapid rises in valuations as demand increases.

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