Conflict-of-interest Issue Rears Up Ahead of Knesset Vote on Planned Israeli Home Tax

Netanyahu says he will support measure despite his multiple homes, but most ministers, lawmakers haven’t disclosed holdings.

Itzik Ben Malki

Finance Minister Moshe Kahlon’s controversial plan to impose a special tax on owners of three or more homes is running into more controversy over whether Knesset members affected by the law should vote.

The conflict-of-interest issue will even affect Prime Minister Benjamin Netanyahu, who told Channel 2 television that he was checking whether he could vote, but added that if he can he will support the measure.

“I have three homes and I will check into [the matter of voting] with authoritative people,” Netanyahu said. Asked if all cabinet ministers with three properties should be voting, he didn’t answer directly. “I can tell you at least what I have. I don’t know which minsters have and which don’t.”

Lawmakers are due to vote on the tax measure, which is part of the Budget Arrangements Law, on October 31. The law, which will probably be amended before it goes to a final vote, aims to discourage people from investing in residential real estate and to sell what they already own by imposing a tax on people who own three or more residential properties.

But the proposal has been sharply criticized for imposing the tax based on the number of homes one person owns but relating only very crudely to the properties’ value. On Sunday, Kahlon, who has staked his reputation on his ability to bring down soaring home prices, urged coalition MKs to support it.

“Coalition members must decide if they support a decision that will help young couples [first-time home buyers] and the middle class or join Yair Lapid, who is defending the upper crust,” Kahlon said in a Facebook posting. Lapid, who devised his own plan for reining in home prices as finance minister in the previous government, has come out against the tax.

Netanyahu and his wife Sara have two homes they own outright – a villa in the wealthy seaside town of Caesarea and an apartment on Jerusalem’s Gaza Road, whose combined value is estimated at 25 million shekels ($6.7 million).

In addition, they own part of two homes their inherited from their parents – a house on Jerusalem’s Haportzim Street and a second in the Ramot neighborhood, whose combined value is as much as 4 million shekels. Under the terms of the proposed tax legislation, the Netanyahus would be liable for taxes of 27,000 shekels a year total on all the properties.

However, which other Knesset members and cabinet members have three or more homes is not clear because the law doesn’t require them to disclose the capital declarations they make on entering office.

At least seven are known to have three or more homes, including Yitzhak Vaknin (Shas), who told TheMarker Sunday he owned a home in Moshav Ya’ara as well as two apartments in the northern town of Shlomi. Nevertheless, Vaknin said he would support the tax.

“Every coalition MK opposed to the proposed law has to explain why he’s against it, and if it is due to the fact that he has three apartments,” he said, adding that the tax would not cause him to sell any of his properties because he is keeping them for his daughters when they marry.

In any event, there is no law that bars MKs from exercising their voting rights. However, Knesset legal adviser Eyal Yinon will have to decide before the vote whether ministers and lawmakers have to disclose their property holdings beforehand.

Knesset sources said he was likely to decide against it for a number of reasons. One is that tax issues are considered too wide-ranging and critical to the economy. Forcing them to disclose could set a precedent for future disclosures that would force MKs to refrain from voting too frequently.

Justice Minister Ayelet Shaked said she shared that view. In a Twitter message Sunday she wrote: “Ministers and MKs on matters of wide-ranging and general matters like taxation are not in conflict of interest. ... We can’t neutralize the public’s chosen representatives.”