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Breaking Update

Fake property tax declarations evade payment

Four brothers accused of evading NIS 1.8 million in capital gains tax by submitting fake property declarations to the Land Appreciation Tax Authority in.

Israel Tax AuthorityPublic

The tax authority – through the Investigation Officer of Haifa and the North, is conducting an investigation against four suspects, brothers from the Khalil family, suspected of making a false declaration to the Land Appreciation Tax Authority in Nazareth regarding the sale of apartments in their name, thereby evading capital gains tax totaling over 1.8 million ₪. Concurrently, an investigation is underway against the buyers, two brothers from the Kahili family, suspected of submitting a false declaration to the Land Appreciation Tax Authority in Nazareth regarding the purchase of the apartments, thereby evading acquisition tax totaling 400,000 ₪.

In August 2023, the four suspect sellers, through their lawyer, submitted an online declaration stating that they sold an entire 5-story building including 4 apartments for a total value of 6 million ₪. Each of the suspects declared the sale of one apartment in the building and attached a request for exemption from capital gains tax. Accordingly, the two suspect buyers also submitted a false declaration based on these figures.

From the findings of the investigation and the audit conducted by employees of the Land Appreciation Tax Authority in Nazareth, the building being sold includes 8 apartments and not 4 as declared by the suspects. Additionally, it was found that the estimated value of each of the 8 apartments sold is 1.375 million ₪, totaling 11 million ₪ and not 6 million ₪ as declared by the suspects. Furthermore, it was found that the suspect sellers do not meet the conditions for exemption from capital gains tax because two of the suspects own an additional apartment, and regarding the other two suspects, it was found that they were not the owners of the property for 18 months.

From the investigation findings, it appears that the suspect sellers evaded capital gains tax totaling 1,888,708 ₪. Additionally, the arrest request indicates that the suspect buyers evaded acquisition tax totaling 400,000 ₪ and assisted the sellers in evading capital gains tax.

The six suspects were brought before the Magistrate’s Court in Haifa and were released under restrictive conditions. The investigation is ongoing.
 

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Israel Tax Authority
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