Buyers groups cost state more than NIS 500m

Buyers groups purchases land from private parties were not liable to VAT, which is not the case when a contractor makes a similar purchase. In addition, buyers groups do not pay VAT on development expenses. Since the homebuyer is a member of the buyers group that is building the building, there is no purchase tax either. Finally, since the buyers group is not a registered company, it saves the contractor's profit and VAT on it. 55% of buyers group operate in Tel Aviv, 25% in the Dan region, and 14% in the Sharon. In other words, more than 90% of buyers groups operate in metropolitan Tel Aviv. In addition, most of the homebuyers in buyers groups' projects buy the apartments for investment, not as residences.