Many apartments that were originally slated for residential purposes are really used as offices. In the past, these types of apartments were not entitled to the exemption from Capital Gains Tax when sold.
However, in an effort to flood the market with apartments, thereby bringing down the prices,the tax authorities decided last year to exempt these apartments from Capital Gains Tax as well. It seems that this did not work out as hoped. In an article by Globes from April of this year it appears that only about 20 apartments went back into the market as residential due to this measure.
I don’t think that this is the end of the matter though. This type of measure takes time
to bear fruit. These properties are usually rented out and it may take time to vacate tenants.
Also, many such properties received permission from the local municipality for a limited period
of time to conduct a business in a residential apartment. As these limited periods come to an
end and the municipalities refuse to extend them we may see more such properties enter the
real estate market.
