The Marker,  Adi Cohen, 30.12.2020

Following the Corona crisis, the tax authority will extend the tax-exempt period for the sale of the old apartment for another nine months - until June 2021.

The extension of the exemption period, which was approved earlier this week in the Knesset plenum , is an update to the previous extension approved in July - which expired last October. The purpose of the move is to help thousands of Israelis who have recently purchased a second apartment - and are unable to sell their old apartment.

Adv. Sagiv Ron Photo: Nir Shamir

Today, housing developers who buy a new apartment and sell an apartment they own - enjoy an exemption from praise tax on the sale of the old apartment - as long as it is sold within a year and a half from the date of purchase of the new apartment.

For those who purchased their new apartment from a contractor or purchase group - the date given to them by law in order to enjoy the exemption for the sale of the old apartment, is up to 12 months from the date of delivery of the old apartment. For the sale of an apartment that is not the only apartment for its owner, the appreciation tax is estimated at the rate of 25% that the seller pays on the difference between the price of the apartment when purchased and the price of the apartment at the time of sale. During this period, housing improvers also benefit from the purchase tax relief on the new apartment. In the event of a deviation from the time frame defined by law - the housing improvers are required to pay the tax in accordance with the levels defined by the authority - which start at a rate of 5%. According to the approved decision, as stated, the defined period between the purchase of the new apartment and the sale of the old apartment for the purposes of granting the exemption will be extended - until June 2021.

Meanwhile, some believe that this is a move that will harm the housing market and may slow down the pace of transactions in the market. The extension of the exemption period allows the property owners to enjoy its lease, while waiting for a potential increase in the yield from the sale - in light of the trend of an increase in housing prices. Critics of the decision add that the victims of the move are actually the homeless, who are interested in buying a first apartment from the housing developers who will now not be in a hurry to sell the conference.

"This is a welcome and important move that will affect everyone who bought an apartment in order to improve their housing, even in the year before the crisis began," says Adv. Sagiv Ron, a partner in the firm of Binyamini & Co. and specializing in real estate taxation. The period between last March and next July. This means that people who bought a moment before the crisis, have an order of magnitude of three years to sell the old apartment - instead of a year and a half. "It is true that the market has not stopped completely this year and that the slowdown we have seen is slowly being released since the vaccine was announced - but in my opinion most of the deals were from investors, and we still encountered quite a bit of difficulty for customers to sell their old apartments during this period."