News Column

Developers slam zero VAT new homes plan

June 17, 2014

By Shlomit Tsur, Globes, Tel Aviv, Israel

June 17--"I had hoped that the zero VAT plan would not materialize," said Fishman Holdings chairman Eliezer Fishman at the Ernst & Young Israel Real Estate Conference today. "Globes" commentator Moshe Lichtman moderated the panel on real estate forecasts.

"Why give a discount on VAT for apartments, but not on medicine, for example?" asked Fishman. "Now, everyone will constantly seek more and more VAT breaks, which will destroy Israel's tax system. Meanwhile, all the developers are sitting on their asses and are not building. If you want to lower home prices, stop harming and extorting contractors. Why zero VAT? After all, only a few people will be eligible for the tax break, after which prices will soar."

Fishman added, "Ariel Sharon once consulted with me about regional planning commissions, and asked about corruption. I told him that even if I were to bribe somebody, it wouldn't help, because the commissions don't know how to approve development plans in less than ten years. If I take into account a ten-year approval process, I won't be disappointed, and I am 80 years old."

Fishman Holdings controls real estate companies Jerusalem Economy Ltd. (TASE:ECJM) (JEC) and Industrial Buildings Corp. (TASE: IBLD). Eliezer Fishman is the controlling shareholder in "Globes".

The zero VAT plan is a disaster for generations said Africa-Israel Residences Ltd. (TASE:AFHS) CEO Oren Hod. "There is no responsible adult in the government who takes the long view. It's impossible to manage policy when the ten social commandments change every morning. One day it's zero VAT, and tomorrow its target prices. In this reality, everyone manages his own risks. The numbers are bad: 137 salaries [to buy an apartment], which families struggle to achieve. The way to solve this is to increase manpower at the planning commissions, but that does not make headlines."


(c)2014 the Globes (Tel Aviv, Israel)

Visit the Globes (Tel Aviv, Israel) at

Distributed by MCT Information Services

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Globes (Tel Aviv)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters