Shlomo Nehama won an appeal against the tax authority: he will not pay NIS 4 million in praise tax – a lawsuit

0
14


Former Bank Hapoalim chairman Shlomo Nehama will be able to receive an exemption from praise tax on an apartment he sold in 2013 in the Rothschild 1 project in Tel Aviv (about NIS 4 million after interest and linkages) for NIS 45 million, after his appeal was received against the director of real estate taxation. Tel Aviv.

By law, an uninhabitable apartment envelope does not entitle the seller to an exemption from praise tax. The Tax Authority claimed that Shlomo and Nurit Nehama did not meet the conditions that qualify for the exemption because they renovated the apartment from the “envelope” level only for the purpose of the exemption, and the essence of the agreement between them and the buyers of the apartment was the sale of an envelope apartment. A criminal investigation was also opened against Nehama in 2014 in this matter, but the case was closed.

The question that arose in the Appeals Committee (Tel Aviv District Court) was whether renovation work done for the purpose of selling an apartment turned it into a residential apartment given that the renovation is not part of the agreements between the seller and the buyer.

Judge Hari Kirsch ruled (“after hesitation”) that the property being sold meets the definition of a residential apartment at the time of the transaction. According to him, turning a real estate property into a residential apartment in order to enjoy some tax advantage is not in itself an artificial action – and the determination depends on the case.

He stated that in this case Nehama came out of a point of discount or expectation that the buyer would not leave the renovation intact and this with a high probability given the quality of the property and its price. He added that the expected temporary nature of the property’s interior completion work brings the couple’s actions closer to an inadequate tax reduction – a kind of tax exercise done entirely to entitle him to a tax exemption – but the fate of the renovation was beyond their control after the sale. “For them, they sold a property that meets the definition of a residential apartment and were indifferent to the buyer’s plans for the future,” he wrote.

Judge Hari KirschPhoto: Courts website

He added that the couple had originally purchased a residential apartment from the developer (Habas) and only due to upheavals and delays that occurred in the planning of the floors did the nature of the purchase change at a later stage to purchase a shell.

“It must be concluded that the appellants separated from the property when it fulfilled the foundations of the definition of a residential apartment. Zvi Friedman, and with the result, the third member of the committee, Adv. Dan Margaliot, also agreed.

The issue was at the center of an investigation by the Tax Authority and Nehama has already been summoned to a hearing by the State Attorney’s Office. In 2016 after a hearing was held, the prosecution informed Nehama that it had decided not to file an indictment against him on suspicion of committing offenses under the Real Estate Taxation Act. It was also decided not to prosecute his lawyers, who were also summoned to a hearing, Geva Habib and Orit Koch. The case against the three was closed for lack of sufficient evidence.



Source link
https://www.themarker.com/law/1.9005240

LEAVE A REPLY

Please enter your comment!
Please enter your name here