Israel historic properties to surge in price on betterment tax reform

The Tax Authority has a surprise hidden in the 2008 budget. Along with cancelling sales tax and cutting purchase tax on real estate deals, the government this week approved a hike of 'historic tax' on real estate transactions. According to the decision, betterment tax levied on historical property owners will increase by 2 percent in 2009, stretching from 14 percent on transactions involving property acquired before 1948 to 26 percent on the sale of property purchased in 1960. From 2010 on, tax will increase by 1 percent annually.