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 approximately 4.4 million shekels, while Leon Bouaziz, Steinmetz's father-in-law and the formal owner who sold the property, contends that the tax should be only about 1 million shekels. The disagreement centers on whether the transaction should be taxed as a corporate sale or a personal one, with the case 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 to tax authorities that he purchased the villa in trust for Travedis Finance, a company registered in the British Virgin Islands owned by Steinmetz, who actually paid for the villa. In 2024, Bouaziz sold the villa to Tamir and Marina Poleg for 27 million shekels.

The tax authority's position, supported by the Netanya Real Estate Tax Manager, is that the seller and buyer were the company Travedis, not Bouaziz personally, as the villa was acquired in trust without notification of personal trusteeship for Steinmetz. Therefore, corporate tax rules apply, which are less favorable than the personal linear tax rates. The tax authority also refused to allow renovation expenses to reduce the sale value.

Bouaziz argues that the economic substance of the transaction should be considered, not just the legal framework. He claims the villa was bought with Steinmetz's funds, used by the Steinmetz family, and that the sale was not a transfer from trustee to beneficiary. He acknowledges a previous error in calculating capital gains tax as corporate tax but insists this should not justify applying the same method for purchase tax. The appeal is represented by attorneys Doron Levy and Yair Avraham.

Benny Steinmetz, owner of BSGR, a mining and investment group, has faced legal issues abroad, including prison sentences in Switzerland for bribery related to his business in Guinea and Romania. Arsuf is a small, exclusive community near Kibbutz Shefayim, known for its luxury villas owned by prominent figures such as Idan Ofer and Adam Neumann. The village has no businesses or public transport and is fenced off, restricting beach access.