Photo Credit: Hillel Maeir/TPS
A construction site in the neighborhood of Har Nof in Jerusalem

MK Moti Yogev (Bayit Yehudi) says that he has a better plan than Finance Minister Moshe Kachlon’s to help first-time home buyers, in an interview he gave Arutz-7.

Kachlon’s plan was to tax home owners with three or more apartments to social engineer the owners into selling their “extra” apartments which they bought for investment purposes, such as for pensions or for their children. Kachlon believed the new tax burden would force more apartments into the market.

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Kachlon’s plan backfired as investors slowed down their new purchasing, hurting the real estate market, while current real estate owners (whether they owned three apartments or not) simply planned to roll the extra taxes onto their renters, hurting the sector that Kachlon said he was trying to help.

After Israel’s Supreme Court shot down Kachlon’s law, MK Yogev said, “I do not like the High Court’s intervention in Knesset legislation, and it should have returned the matter to the Knesset for debate, but in this case it acted gently.”

Kachlon plans to bring the 3rd apartment tax to the Knesset again.

Finance Minister vowed to “continue to fight against [real estate] investors for the young couples, in every way I can,” according to a YNet report.

Apparently Finance Minister Moshe Kachlon is a populist, anti-capitalism, anti-free market ideologue.

Yogev also pointed out the inefficiency and unfairness in Kachlon’s lottery system for first-time buyers, which wouldn’t apply to all qualified new buyers, but only the lucky lottery winners.

The lottery system also forces contractors to build the lottery apartments as part of their larger projects, for little if any profit, so that Kachlon actually has apartments he can raffle off to some lucky couples. Couples who can afford first-time apartments are also holding off making purchases, in the hope they might instead win a cheap one in the lottery.

Yogev recommends direct financial assistance in the form of subsidies to first-time home buyers, as well as reducing the personal equity required from 30 percent to 20-25 percent.

Yogev believes that this will allow more citizens to buy their first home without all the downsides associated with Kachlon’s plans.

What Yogev didn’t say is where the government would be getting the estimated three to four billion shekels in financial aid needed for the prospective new home owners.

Another alternative solution, which wouldn’t cost taxpayers, but it not being put forward, is to allow contractors to more freely build in Judea and Samaria, where there are wide-open spaces close to the country’s main population centers. Construction costs are noticeably less in Judea and Samaria, and there is a high demand for new homes which isn’t being matched by new construction due to the government’s ongoing settlement construction restrictions.

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