A construction developer claimed that he was entitled to a tax benefit in relation to the entire area of the building that was approved as a new building for residential rental, and not just in relation to the part of the building intended for rental.
The Supreme Court ruled that the developer is entitled to a tax exemption, but only for the part of the building intended for residential rental. The Investment Encouragement Law is designed to incentivize developers to build investment apartments in order to increase the supply of residential apartments. In doing so, a developer can submit a plan for approval, and to the extent that it shows that the building is intended for residential rental, it may be entitled to relief. However, the relief will only be granted in relation to the part of the building intended for rental, and not the entire area. Here, only part of the building built by the developer is intended for residential use, and therefore the benefit will only be granted in relation to this part of the building, and not the entire area built.
