As part of his efforts to combat the rise in housing prices, Minister of Finance Avigdor Lirberman has announced plans to hike purchase tax to 12.5% on investors who buy four or more apartments, regardless of the price of the apartment, Globes reports. Investors who own more than one home currently pay purchase tax of between 8% and 10%, depending on the value of the apartment.

Will this affect the market? According to real estate taxation expert Adv. Shay Einat, a lawyer and an accountant, the difference between the current purchase tax brackets and Lirberman’s new plan is significant. “To date, regarding an apartment for investment, the purchase tax rate is 8% on amounts of up to NIS 5,525,070 and above that, the rate rises to 10%. According to the proposal, the rate would rise to 12.5%, regardless of the price of the apartment.”

“We are talking about luxury apartments being hundreds of thousands of shekels more expensive. But investors prefer to invest in relatively cheap apartments, which bring higher returns. The current hike in these apartments is a relatively meager amount of NIS 100,000, which is worth two years rent.”