Calcalist, True Gazit, 26.02.2020
A dispute over the NIS 100 million improvement levy between the Tel Aviv municipality and hundreds of apartment sellers in the city is coming to a decision. The Calcalist learned that in May, the Tel Aviv District Appeals Committee for Planning, Compensation and Improvement Commissions will begin a marathon hearing on 341 appeals filed by the Tel Aviv Municipality against decisions by crucial appraisers. These decisions reduced the height of the levy levy that Tel Aviv imposed on apartment sellers in District 3, which stretches from the sea in the west to Ibn Gvirol Street in the east, and from Ben Zion and Marmork streets in the south to the Yarkon River in the north.
Over the past week, hundreds of apartment sellers have been summoned by the Appeals Committee. According to the summons, one central discussion will be held on the decisions of each of the eight crucial appraisers who have ruled on the improvement levies in District 3.
The controversy over the height of the improvement levy was born in January 2018, when the plan governing new construction in Quarter 3 took final effect.According to the plan, a UNESCO World Heritage Site in demolition and rebuilding projects will be able to construct a new building with up to 5.5 floors, and up to 6.5 floors will be built outside the declaration area.
The improvement levy is 50% of the increase in the value of the apartment as a result of the approval of a new building plan, which is charged when selling an apartment or applying for a building permit. The municipality claims that the plan for District 3 is improving every apartment in the building, but that the homeowners claim that there was no improvement because even before the approval of the plan for District 3 it was possible to add exactly the same building rights through TAMA 38, the national plan to strengthen earthquake structures. The decisive appraisers supported the apartment sellers' position and canceled or cut the levy by a sharp 70% - 90% levy, and Tel Aviv appealed each of these 341 moles, and discussions that may begin in May may eventually release the bottleneck and bring back hundreds of apartments In addition, it is estimated that a clear decision will accelerate construction projects in District 3.
Real estate appraiser Danny Trashansky of Camille-Trashansky Raphael's office, who represents apartment owners, told Calcalist: "The improvement component of the borough plan has received astronomical dimensions estimated at 20% of the value of the homes sold. - NIS 600,000 for a typical 70sqm apartment, hence the demand for payment of a NIS 300,000 improvement levy. That is the cumulative amount of 341 apartments for which the municipality is fighting, over NIS 100 million.
Tarshansky added: "We have to understand that the big chunk of the transaction price has two meanings: either the homeowners will not rush to sell and then projects will get stuck, or the homeowners will embody the sale and the prices will skyrocket."
Adv. Ariel Kamenkowitz, who represents Tel Aviv property owners in proceedings before the Appeals Committee, estimates that the discussions will continue for months: "The likely assessment is that there will be a number of hearings in each case, initially at the principle level and in disagreements common to all appeals, and later on the individual issues in each case.Because these are the hundreds of cases that have accumulated over a relatively short period of time, decisions will only be made in a long time. " Supreme Court".
* * *
A pending housing market
Waiting for a dispute over Tel Aviv's housing surcharges reduces housing supply and contributes to price increases
The decision of the Planning and Building Appeal Committee will dramatically affect the prices of apartments and the supply of apartments in Tel Aviv District 3. Today there is uncertainty about the level of the improvement levy. Since hundreds of thousands of shekels are at stake, many apartment sellers prefer to wait to be decided. Accordingly, the market reports a sharp decline in the number of transactions for the sale of apartments, which contributes to an increase.
If the commission accepts the position of the Tel Aviv municipality, the apartment sellers will roll the levy on the buyers, which means they will raise the price they demand. A typical apartment in District 3 costs about NIS 3 million, and the average improvement levy is 10% of the price of the apartment, which means the average price will reach NIS 3.3 million.
In a scenario where the commission will reject the position of the Tel Aviv municipality, this is expected to appeal to the legal courts, thus causing the apartment sellers an additional unexpected expense of several tens of thousands of shekels. All of these, combined with the sellers' waiting for a final ruling, could in turn lead to price increases, simply because of the decrease in the supply of apartments.
To this should be added the dozens of projects that are also awaiting a decision on the level of improvement levy demanded by the municipality with the issuing of building permits, each with the potential to add about 20-10 apartments. In this case, if the committee adopts the municipality's position, the entrepreneurial companies will have to decide whether to withdraw from the project or roll out the unexpected improvement levy on purchasers of the new apartments.
The Appeals Committee is the latest planning body. Once the committee has ruled, the parties have the right to appeal to judicial courts - the Administrative Court, followed by the Supreme Court.