The Minister of Interior Affairs, Mr. Gideon Sa'ar, authorized the city and local councils to charge and collect double Municipality Tax (“Arnona”) on homes and apartments that are unoccupied (“Ghost Houses”). This order must be approved by the Minister of Finance Yair Lapid, who plans to do so in the next few days.

According to the Treasury Department, Israel has more than 40,000 “Ghost Houses”, for which the new regulations will apply.

Under these new regulations, if the electricity consumption in these assets is not above 10% of the national average household consumption these apartments will be considered “Ghost Houses” and will be taxed accordingly. There is a suggestion to also check the water consumption as criteria.

These new regulations come as part of The Finance Committee’s goal to solve the prices of housing in Israel in general and in the major cities in particular. This is another step following the Finance Committee’s changes in the taxes for the purchase and sale of residential real estate especially regarding foreigner. One of the main reason for applying these new regulations is to put pressure on those holding real estate as holiday homes and use is for short periods of time during the year to rent out these apartments. By putting these apartments on the rental market, especially the ones located in the city centers, it will increase the supply of apartments for rent.