Real estate taxation · Implementation Instruction
Purchase of a Residential Apartment Presented as a Purchase of Land and a Separate Order of Construction Services: 7/2001
Summary
As at the date of its publication (2001), the instruction provides, following Civil Appeal (Tax) 5024/99 Lang v. Real Estate Taxation Director, Hadera, that where a purchaser enters into an agreement to purchase land and, in parallel, into agreements to order construction services, co-ownership and the like, and there is a direct link between the agreements, the transaction should be regarded as the purchase of a built structure and not the purchase of land only; the split may also be deemed an artificial transaction under section 84 of the Law. The instruction lists indications (in a non-exhaustive list) that the sale is of a finished building, such as marketing the project as an apartment project, an obligation to sign all the agreements at the same occasion, building permits in the name of the developer or contractor, undertakings under the Sale (Apartments) Law and a developer's profit exceeding an accepted contractor's profit. It was further determined that such a split may indicate two sale transactions, and that in every case in which a split is discovered, a copy of the file is to be forwarded for examination of the criminal aspect.
The summary was written by the office and reflects the instruction as of its publication date. The binding text is the official Hebrew publication, and the instruction may have been updated or affected by later legislation and case law. The English title and summary are an unofficial translation.
Publication details
- Type
- Implementation Instruction
- Number
- 7/2001
- Publication date
- 15.11.2001
- Topics
- Purchase tax
Official document
Source: The publication on the Israel Tax Authority website (gov.il, Hebrew)
Suggested citation
Israel Tax Authority, Implementation Instruction 7/2001, "Purchase of a Residential Apartment Presented as a Purchase of Land and a Separate Order of Construction Services: 7/2001" (15.11.2001) [Hebrew]
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