Cancellation of tax benefits – what the government has planned

Israel's Ministry of Construction has presented a strategy for reforming the rental housing market, which includes canceling the tax exemption on income up to 5,654 shekels per month and introducing universal mandatory reporting. The goal is to increase tax revenues and create transparent government records. The authorities also plan extrajudicial sanctions against dishonest landlords and incentives for institutional investors.

Israel's Ministry of Construction has presented a comprehensive strategy for reforming the rental housing market. The key measure is the cancellation of the tax exemption on income up to 5,654 shekels per month, which, according to officials, allowed landlords to avoid reporting. Universal mandatory reporting for each property will be introduced. The rental market is estimated at 50 billion shekels annually, involving about 900,000 apartments where 2.5 million people live. In addition to tightening reporting, the strategy includes extrajudicial financial sanctions against violators. To encourage long-term rentals, the state plans to subsidize interest rates on construction loans, sell land at reduced prices, and provide tax preferences to institutional investors. Previously, similar initiatives faced opposition from the Knesset.