Are you affected by the tax on vacant housing?

A decree has just expanded the number of municipalities subject to the tax on vacant housing. Is yours one of them?

Until now, only cities located in high-demand areas—specifically, particularly attractive urban areas with more than 50,000 residents—were subject to the tax on vacant housing. However, this tax may apply to other municipalities starting in 2024. In addition, the amount due is higher than before, as the tax rate has been raised by one-third.
 

For the record, a vacant dwelling is a residence that has basic amenities (electrical wiring, running water, plumbing fixtures, etc.) but is unfurnished or has insufficient furniture to make it habitable. The tax applies to the owner of the dwelling, the usufructuary, the holder of a building or renovation lease, and persons who have entered into a long-term lease with the owner.
 

To increase the number of properties available on the housing market, the government has just expanded, through a decree dated August 25, 2023, the scope of the TLV to include municipalities located outside high-demand areas. These are towns that exhibit a marked imbalance between housing supply and demand (high rents or purchase prices for existing homes, a high proportion of second homes relative to the total number of housing units, etc.).
 

As a result, the number of urban areas with more than 50,000 residents located in high-demand areas rose from 1,151 to 1,434, an increase of 283 municipalities; the second zoning classification introduced by the August 2023 decree includes more than 2,200 municipalities characterized by high purchase and rental prices or a high proportion of second homes relative to the total housing stock.
Given the late publication of the decree, the new measure will take effect on January 1, 2024, rather than in 2023 as originally planned.