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Mechir Matara and Zero VAT

The “Target Price Program” (Mechir Matara) – in the context of the cancellation of the “Zero VAT Program”


The announcement of impending elections, coming soon after the untimely scrapping of the Zero VAT program aimed at reducing housing prices for those eligible, was a serious blow to the Israeli public. Many people, including young couples who had decided to postpone their home purchase, saw housing prices continue to climb.
Despite the bad news of the cancellation of the Zero VAT program, it turns out that there is another program with far higher chances of being realized. This is the Target Price Program, designated to make a lot of new projects more viable.
In what follows we will explain the significance of the program, see who is eligible to participate and when we can expect building starts of participating projects.

Discounted Housing

Similarly to the zero VAT program, the Target Price program is aimed at allowing various eligible persons to purchase new housing at a discounted price. The discount should be a true discount, and be comparable to market prices in the same area, for example, Jerusalem Vacation Rentals prises as opposed to Jerusalem real estate and Jerusalem rentals.
According to the Zero VAT law, the discount is supposed to be identical to the VAT at the time (presently eighteen percent), however experts predicted that the actual discount would be less. According to the Target Price Program, the discount on housing prices will be approximately similar, and will be twenty percent of the price of an equivalent apartment in the area.

Housing eligibility

All of the details of the Target Price program have not been finalized and authorized, and as such not all of the criteria for eligibility have been fully formulated. However what is clear is that only residential home buyers will be eligible. Most of the buyers are expected to be individuals or couples that have never owned a home. A smaller portion of those eligible would be what is known as “home improvers”. These would have to sell their current home within a year or less once the new home is purchased.

High quality homes

According to Ministry of Housing plans, Target Price housing is expected to be integrated into projects in different towns around the country. The apartments will all be between sixty and one hundred and fifty square meters in size, while it is expected that construction quality and technical specifications will be under supervision.
In order to promote the program designated tenders should be released soon, thus a significant improvement can be expected already in the near future.