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Thursday, March 20, 2014

Lapid wants to exempt first-time homebuyers from 18% VAT...except Haredim

Finance Minister Yair Lapid wants to lower the cost of housing for first-time buyers by exempting them from 18% VAT on new home purchases. Except for Haredim. Lapid says that Haredim 'don't need a discount.'
According to the proposal by Finance Minister Yair Lapid, value-added tax (VAT) would be eliminated for first-time apartment buyers. According to Lapid's plan, families who get the discount would have to hold onto the apartment for at least five years. This measure is intended to prevent couples from buying apartments for the purpose of trading in them. VAT is currently 18%.
Lapid's plan would provide the discount to Israelis who had at least one family member who served in the IDF – excluding most hareidi and Arab families, both groups that generally do not serve. Hareidi groups and several ministers, including Housing Minister Uri Ariel, have urged Lapid to make the plan inclusive. Ariel said he supported the plan, providing it was inclusive – adding that he himself had made a similar proposal several months ago.
It is not clear if Lapid's condition would stand up to examination by the High Court. In the past, National Insurance child allowance payments were given only to families who had a member serving in the IDF, or who had received exemptions from service. Arab and leftist groups sued, and after several decisions by the High Court in the mid-1990s, the government eliminated the requirement.
However, the Finance Ministry on Thursday said there would be no issue of discrimination, at least in the hareidi sector – because home prices there were already discounted, compared to the price of homes in secular communities. A typical four room apartment that went for NIS 1,235,000 in Bnei Brak, for example, would cost 30% more in neighboring Ramat Gan – and as much as 86% more in Tel Aviv. The apartments, the Ministry said, were of similar size, age, and in areas with populations with similar demographics.
Location, location, location.... That apartment in Tel Aviv is in a fancy new tower in Ramat Aviv or Tzahala. The one in Ramat Gan is in the nicer part that doesn't border Bnei Brak. The one in Bnei Brak is on a dingy, dark street. In Jerusalem, a four-room apartment goes for NIS 1.6 million - if you're willing to wait 2-5 years for it to be built. I wonder if they tried comparing Ramat Beit Shemesh Beit to one of the National Religious neighborhoods in Beit Shemesh....

There's no way this stands up to Supreme Court scrutiny anyway (the Supreme Court could care less about the Haredim but they won't allow discrimination against the Arabs). It just shows again Lapid's visceral hatred for Haredim. Like father, like son.

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At 10:23 PM, Blogger Red Tulips said...

I do not support this bill and do not support discrimination either against Haredim (which this bill clearly is) or in favor of Haredim (which Haredim enjoy when they have a draft exemption).

In other words, if you are against discrimination, why are you only partially against it and not totally?

At 7:50 AM, Blogger DaveLB said...

Its interesting that after the recent draft law was passed (with criminal sanctions included, despite several key players promising that this would not be), several of those instrumental to passing it seemed to be expressing some critique of the law (Shaked, Stern etc.). However sincere or insincere such post-hoc statements may be, they represent rational politics after passing a controversial law that offended one political sector - i.e. to now try to make nice a little.

But Lapid isn't even bothering to hide what he really thinks of Haredim. He really is quite a fanatic.

At 8:02 AM, Blogger DaveLB said...

It's interesting that after the recent draft law was passed (complete with criminal sanctions despite several key players swearing they would never support this), several of those who were instrumental in passing it (Shaked,Stern, some Likud members) were making post-hoc statements criticizing the law they just voted to pass.
However sincere or insincere such statements may be (and even a bit odd), they do represent rational political action after passing a law which was offensive to a significant minority. In other words, Sheked and others are now trying to mollify the opponents of the draft law - or make nice to them at least with words.

But Lapid isn't even bothering to try. In fact he is doubling down on his anti-Haredi approach with this discriminatory tax relief.
In political terms he might be termed a fanatic.

At 8:12 AM, Blogger DaveLB said...

Wow! Did I hear the Israeli Finance Ministry correctly?
" there would be no issue of discrimination, at least in the hareidi sector – because home prices there were already discounted."

So they base the official justification for a policy on the phenomenon that there are sectoral differences in the value of housing stock?

To put this in perspective, just take that statement and replace the words "Hareidi" with "Ethiopian Jew" and then replay it.
And this is from a public policy rationale from an Israeli Government ministry.


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