Principles of the Improvement Levy

Beyond the rate of the improvement levy, which is half of the said improvement, the law defines “improvement” as an increase in the value of real estate due to the approval of a plan, the provision of relief or the permitting of excessive use.

The law prescribes three planning actions for which an improvement levy may be levied: approval of a plan, granting of relief or permitting excessive use.
Two conditions must be met in order for an improvement levy to be imposed: first, the value of the land has increased; Second, due to one of the planning actions set forth in this section. These conditions cumulatively create the charge in the improvement levy.
The taxpayer; the owner should be taxed, only when the profit generated got a tangible-economic expression.

The principle of realization is based on three reasons: First, taxation at the time of realization makes it possible to deal with difficulties in estimating the growing profit for the taxpayer before realizing it.

Second, as long as the taxpayer has not realized the profit, there is uncertainty as to the possibility that the taxed profit will indeed grow in the end. Another reasoning emphasizes liquidity, according to which the taxpayer must be taxed when he has liquid sums of money that allow him to pay the tax or levy.

The principle of the date of payment of the improvement levy stands in contrast to other tax payments, where the aim is to collect them as close as possible after the tax event. Such as income tax, VAT, property tax, appreciation tax, and other taxes.

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Apartments in Israel
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Rise in the price index of input in residential construction from the year 1956 to 2021
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