Your Taxes: Israeli property flip ends with a costly VAT lesson
A recent Israeli court ruling offers a costly lesson for property investors: recovering VAT when buying a property can create a much larger VAT bill when plans change.
An Israeli District Court recently ruled that a property flip could not be reversed due to a costly VAT lesson. The taxpayer, an American LLC, owned an Israeli real estate entity consisting of residential apartments and shops. In 2008, they purchased the property for NIS 3.7 million including VAT, and successfully recovered the input VAT due to their intention to flip the property.
Eight years later, when they sold the property for NIS 33.34 million, the COURT ruled that full VAT of around NIS 5.7 million applied to the sale, and the taxpayer could not change their mind and request a refund of the previously recovered VAT.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
