During discussions on the state's 2025 budget for Israel, which was approved by Knesateet this week, the Finance Committee raised a proposed law that would have required online platforms such as Airbnb and Booking.com, used in short -term rental deals, to report all transactions. The aim of such a law, which was proposed by the Israel Tax Authority and the Ministry of Finance, was to provide the authorities with tools to deal with the unpaid tax direction on short -term rents.
But discussions on the draft law were one of the shortest financial committee ever. The bill was opposed by every MK at the meeting, led by Orit Farkash Hacohen (the National Unity Party), which accused the Ministry of Finance was trying to make digital platforms in “informants”. Within just 15 minutes, MK Yinon Azoulay (SHAS) closed the discussion by throwing the budget bill.
This bill has already been buried, as its payment through “regular” legislative procedures would be almost impossible, given the strong opposition to such real estate reports by the head of the MK moshe Gafni Finance Committee (the Jewish of the Torah). During the discussion, MKS also criticized representatives of the Ministry of Finance for the small state revenues that the bill will achieve.
20,000 rented apartments
Is the short -term rental market really generates “small money”? A study conducted by the Israel Tax Authority found that in the period 2018-2019, there were between 30,000 and 35,000 apartments in Israel that were rented for short-term vacations through Airbnb, including between 16,000 to 20,000, which increases more than 1 billion NIS. The Tax Authority estimates that the current number of apartments rented for short -term vacations around Israel is about 20,000.
According to a source of tax authority, “In the 2018-2019 period, there was a very large peak in Airbnb apartments, then revenue was evaluated by more than a billion NIS for vacation and entertainment. Since then, the market has undergone major changes early in 2025. Israel and about 10,000 to 12,000 activists across the country.
He added: “It is clear that we have an industry here parallel to hotels that constitute a large part of the market, which is certainly great enough that we want to be reported correctly and the tax properly. This will be an important industry in terms of loser.
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Under the law, taxes are imposed on renting an apartment in Israel in several ways, including an income exemption of 5600 per month, a reduced tax rate of 10 % of the rent, and a marginal tax rate based on tax rates on the owner, when an annual financial report is submitted. But these attractive tax rates do not apply to short -term rents for apartments or rooms. Regarding the tax law, the short -term apartments are not considered residential rental real estate, but rather the business rental real estate, according to the marginal tax rate that can reach about 50 %.
The struggle to collect the tax on the short -term rental market was continuing for years, and was at the core of a petition to the Supreme Court submitted by the Israeli Hotels Association against the Tax Authority in early 2020. The Supreme Court recommended that the hotel association withdraw the petition submitted against Airbnb, due to the effects of the roaming epidemic on the tourism industry, while the tax authority acted to impose taxes on the emerging market. Of other things, audits have been conducted over the years, emphasizing short -term rents, through sites like Airbnb and Booking.com. However, this was a decrease in the vicinity of black funds in the industry, which is established by the tax authority at 100-150 million New or more per year.
Now, the MKS Hotel Association, which prevents the bill, is criticized to close the vulnerability. The data collected by the Hotel Association shows that in Tel Aviv alone, there are about 100 million NIS in taxes that are not collected annually. Appreciation depends, among other things, on the data collected by Airdna – an international company that monitors data on real estate rented from various platforms online.
45 % profitability in Tel Aviv
“At a time of major discounts in government ministries – when the draft law that the Ministry of Finance itself has as part of the Economic Arrangements Law to impose taxes on digital platforms for tourism, there remains a tax on platforms, where there is a tax on the platform,” says Sevan Datocker, CEO of Israel Hotels.
“The estimates offered by professionals are that such a tax can bring about 100 million NIS, if not more, to the state treasures. According to Airdna data, there are currently 2,864 Airbnb apartments displayed in the Aviv Tel (compared to about 6000 eve of this apartment this year about 90,000 of this apartment. 257 million NIS.
“Higher transformations”
“The number of Airbnb apartments and similar networks in Tel Aviv is already higher by approximately 50 % of the number of hotel rooms in the city (in the normal year), and is mostly managed by real estate companies and brokers, with high financial trading rates.
In 2020, the Organization for Economic Cooperation and Development proposed a model for legislation that requires platform operators to submit a report to the local tax authority on users who produce income through them. The European Union has also created a similar model, which requires member states to enact the obligations of reporting in their local laws, and most of them have already created laws on this issue, or in advanced stages of law. Other countries, such as Australia and the United Kingdom, have been planned for similar reports.
In an interview with him recently with “Globes”, Finance Minister Bezalel Smotrich talked about the need to address tax evasion and black funds in the real estate market, saying that the head of the Finance Committee Moshe Javini “drives me to moves in the field of black money. One of them is to report the owner of the real estate apartments, including Airbnb apartments.” He added that he will continue to enhance the demand for public reporting requirements regarding property rental.
It was published by Globes, Israel Business News – En.globes.co.il – on March 27, 2025.
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