Adv. Meir Mizrahi, globes.co.il

Last week, the Tel Aviv District Court issued a ruling on Stein, which debated whether a residential apartment with a design flaw could be considered a "residential dwelling" for tax purposes, and to give the seller the tax benefits inherent in the sale of a residential dwelling.

The court ruled in the majority opinion that such a planning defect does not rule out a "dwelling" as long as it is a defect with which the planning authorities and the local authority have completed.

The judgment speaks of spouses who bought an apartment in Tel Aviv in 1992 and paid a purchase tax in accordance with the definition of "residential apartment".

The apartment contained all the necessary amenities, and the couple had been using the apartment for more than 20 years. When the couple proceeded to sell the apartment, the buyer discovered on examination that he had done according to the apartment's historic building permit from 1945 the purpose of the apartment was to the warehouse and heating room - a fact unknown to the couple for years.

The court found that despite this historic permit, the apartment was taboo as a residential apartment, because the municipality has for years been charging a housing allowance for the use of the apartment, and did not even register a taboo warning about misuse, and did not take any enforcement measures against it.

Due to the existence of the said historical building permit, the tax authority sought to deprive the couple, when they sold the apartment, of the benefit of the praise tax granted to a dwelling at the time of its sale.

The district court rejected most of the tax authority's position that any design flaw removes the property from the definition of "residential apartment."

And if you think that just recently a judgment has been reversed, you are not entirely wrong. This time the court required a difference between this case and the case recently discussed in Guy's judgment - where the judges gave the opposite decision. In that case, the assesses converted a residential apartment building, contrary to the planning and construction laws, not an hour to the authorities' requirement to remove this default, and even demanded it in criminal proceedings. Because of a flagrant violation of the law, the judges ruled that the rule "no sinner should be hired out" should be applied, and the taxpayer should be deprived of the relief from the housing tax payable.

On the other hand, since the Stein couple did not find fault with their conduct and good faith, it was held that this rule should not be applied in their case, and they should be granted the requested benefit.