What is Arnona?
Arnona is the Israeli term for the property tax imposed by any municipality, local authority or regional council in Israel on real estate / property in its territory.
How to determine the amount of Arnona payment?
The sum total of required property tax payment depends on a number of factors, including: property size (measured in square meters) property classification, the area where the property is located (zone), the identity of the property owners / tenants and many other technical details.
The exact amount is specified in the Arnona tax decree published by municipal authorities every year.
Who is required to pay Arnona?
Contrary to what is customary elsewhere, in Israel it is the tenants (not the owner) of the property who are usually the “holders” of the property. Therefore, the tenants are the ones responsible for paying the property tax.
When does the holder of the property pay the Arnona tax?
The property taxes are usually required to be paid on January the 1st of each year. Local authorities may set more favorable arrangements, such as monthly or bi-monthly payments.
Requests for Arnona discounts or exemption
Under certain conditions, one can receive a discount or exemption from paying Arnona, which will save hundreds or thousands of shekels each year. Eligible for rebates, exemptions or refunds (sometimes dependent on monthly income); students, Olim (new immigrants), the elderly, the disabled, single mothers, soldiers, Holocaust survivors, and others.
Buildings used for business operations may also, in certain situations, receive a discount or exemption from paying property rates. For example, different rooms or areas may have a different classification, which raises or reduces rates charged on that area.
Exemption or discount in property tax on empty / unused property
If you’ve bought a new apartment and have yet to move in, your house is undergoing renovation, you live abroad and do not rent out the property in Israel – if a real estate property is empty of tenants and unused for a significant period of time you can get an exemption or discount on the property tax for that period, or part of it, depending on the specifics of the case.
Exemption for non-profit institutions, associations and Amutot
Among the buildings or rooms that are eligible for a discount or exemption from property taxes are synagogues, houses of prayer, buildings used by non-profit organizations, and other real estate areas in which public service activities are conducted. Due to recent changes in the relevant laws, said public activity no longer has to be directed primarily for the benefit of the population of the municipality in which the property is located.
Objection to Arnona charges
How to challenge the amount of property tax that the property holder is required to pay?
First, the initial objection must be submitted within 90 days of receiving the payment notification. The objection may claim that some form of error occurred in the payment requirement. Possible claims are; the municipality made a mistake regarding the size of the property, its classification, its use and the like. The property may not even be in the area of the council which sent the demand for payment of property tax. Of course, these claims must be supported by documents (for example, a certified surveyor’s evaluation of the size of the property).
If the objection is not accepted, the next step is to launch an appeal to the Municipal Property Appeals Committee, which works alongside said municipality. If the decision of the committee is not acceptable to the appellants, there is the possibility of further appealing to the Administrative District Court.
Legal assistance in obtaining an Arnona discount or exemption
The law firm of Cohen, Decker, Pex, Brosh specializes in locating eligibility and obtaining exemptions or discounts on Arnona payments. Our real estate lawyers have proven experience in assisting clients in proceedings with municipal authorities.
In addition to reducing property tax payments, our office helps solve bureaucratic problems with the authorities – property taxes charged on a property you do not live in, listing properties as required with the Land Registry / Taboo, and the like. Appeals or objection to property tax charges can also be filed on these issues.
Attorney Joshua Pex, a partner in the office, serves as chairman of the Tamar Regional Council’s Arnona Committee. Our firm has practical experience on both sides of Arnona reduction or exemption requests.
For a series of in-depth articles on practical issues related to property rates in Israel, click this link.
Contact our office in Petah Tikva or Jerusalem to file an objection or for the purpose of receiving a discount or exemption from the property tax: