The Ministerial Committee for Legislative Affairs approved a
proposal by Construction and Housing Minister Meir Shetreet
to legislate the Rental Building Law, which is designed to
encourage the construction of rental apartment buildings in
both the private and public sectors.
The memorandum includes a proposal to grant both income tax
and land tax reductions. Finance Minister Avrohom Hirchson
expressed support for the proposal, contingent on full
coordination with the Tax Authority and the Finance
Ministry's Funding Department in drafting the bill.
The current Law for the Encouragement of Capital Investment
provides tax breaks for the construction of rental buildings,
but contractors rarely take advantage of these benefits.
According to the proposed law, those choosing to receive tax
benefits under the new law cannot also receive the benefits
that accrue to a rental building according to the Law for the
Encouragement of Capital Investment.
"The passage of the law," said Minister Hirchson, "is good
news for thousands of civilians who are unable to afford to
purchase their own apartment, and will bring an easing of the
financial straits they are in."
According to Minister Shetreet, "When the law takes effect,
young couples and others will be able to avoid taking
stifling, long-term mortgage loans and be able to live under
long-term rental agreements instead, continuing to enjoy high
quality of life rather than bowing under the burden of a
mortgage loan."
