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Israel Tax Authority Rules Shell Properties Under Construction Are Taxable as Completed Homes
An Israeli appeals committee ruled that unfinished properties with seller commitments to complete construction are subject to purchase tax as completed homes. Two brothers and their partners appealed a higher tax assessment on a duplex under construction, arguing it was a shell property.
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What happened
- 01Israeli appeals committee ruled unfinished properties with seller completion commitments are taxed as completed homes.
- 02Buyers argued a duplex under construction should have a lower 5% purchase tax rate.
- 03The tax authority classified the property as a residential home with higher tax rates.
- 04The committee found buyers assuming seller's existing construction contract means it's a residential unit.
- 05The buyers' appeal was unanimously rejected by the committee.
- 06The ruling means buyers in similar situations will face higher purchase tax.
The committee upheld the tax authority's classification, stating that assuming the seller's existing construction contract makes it a residential unit. The buyers will pay the higher tax rate.
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