Tax Dispute Over Multi-Million Shekel Sale of Benny Steinmetz’s Arsuf Villa

A significant tax dispute has arisen following the 2024 sale of Benny Steinmetz’s villa in Arsuf for 27 million shekels. The Israeli Tax Authority demands a purchase tax of 4.4 million shekels, while Leon Bouaziz, Steinmetz’s father-in-law and the formal owner who sold the property, contends the tax should be only one million shekels. The disagreement is currently under appeal at the Central District Court.

Bouaziz originally bought the villa in 1995 for 8.1 million shekels from the Kastiel family and invested an additional 2.8 million shekels in renovations. Over the years, depreciation of 4.8 million shekels was recorded. He declared the purchase was made in trust for Travedis Finance, a company owned by Steinmetz registered in the British Virgin Islands, which actually paid for the villa. In 2024, Bouaziz sold the villa to Tamir and Marina Polag for 27 million shekels.

The core of the tax dispute concerns whether the seller should be considered Bouaziz personally or the company Travedis. The Netanya Real Estate Tax Manager ruled that the transaction was between companies, applying corporate tax rules rather than the more favorable personal linear tax. He also refused to recognize renovation expenses as deductible from the sale price.

Bouaziz argues the economic reality should be considered, noting the villa was purchased with Steinmetz’s funds, used by the Steinmetz family, and the ultimate beneficiaries of the sale are the Steinmetzes. He admits to mistakenly calculating capital gains tax as corporate tax but insists the Tax Authority cannot use this error to justify the purchase tax calculation.

Benny Steinmetz is a billionaire businessman involved in diamond, gold, and metals mining through his BSGR group, with investments in real estate and high-tech. He has been convicted abroad for bribery but has not served prison time in Israel. Arsuf is an exclusive community near Kibbutz Shefayim, known for its luxury villas owned by prominent figures including Steinmetz’s family and other Israeli elites.