Looking for a small investment property in the heart of the city? That search will prove increasingly more difficult starting this month.
The betterment tax exemption which has already been extended from March is now over. The exemption was for the most part a feeble attempt by the state of Israel to lower prices on investment properties. Betterment tax is a tax on capital gained from selling real estate.
There are a number of exemptions to this tax. For example someone who is selling an apartment and has not sold another apartment within the last four years is exempt from paying this tax. The most recent exemption allowed even those who have sold properties within the last four years to sell without paying the tax. This definitely increased the amount of investment properties for sale on the market, but without truly decreasing the prices.
While more supply usually leads to a decrease in prices, the demand for apartments still far outweighed the supply. Now that the exemption is over prices it is predicted that prices will continue to increase.