Finance minister proposes to convert apartments used for offices into residential dwellings, re-zone public land to permit home building and raise tax on owning more than one home.
After huge success in slashing mobile phone rates, new Finance Minister Moshe Kahlon hopes to do the same with sky-high housing costs with reforms aimed at increasing supply and cooling demand by raising taxes on investment homes.
The soaring cost of owning a home – and of living in general – has fuelled fierce public debate for years in Israel and helped touch off mass street protests in 2011 that served as a wake-up call to political leaders.
Kahlon, who as communications minister in 2012 opened up the mobile sector to competition, is merely the latest politician to try to dampen the molten housing market.
Since 2007, house prices have nearly doubled, the Bank of Israel says, thanks to low interest rates and a myriad of bureaucratic obstacles that limit new home construction.
This has sent mortgage loans to record highs and monthly payments down, with many Israelis locking in the tax advantages of owning property over stocks and bonds.
Contractors blame high prices on lack of land released by the government – which owns more than 90 percent of the country\’s territory – and the long process to obtain permits.