Arnona (Municipal Property Tax) Order – What is important to know?
A new Arnona order is issued by every municipality and regional council in Israel on a yearly basis. The order publicizing the updated Arnona rates is usually issued towards the end of the civil year, and is valid for the following year. Some real estate owners have consulted the Arnona order once, many years before, and never bothered to check it again. Anyone who has recently purchased an apartment, or any real estate property may not even know that such an order exists. In any case, the information is regularly updated, and it is recommended to check every year.
Our Law office specializes in real estate and property tax law. We help our clients receive Arnona discounts or exemptions, as well as dealing with Arnona queries and appeals. In this article, attorney Michael Decker will explain what is important to know, and what to pay attention to, when a new Arnona order is issued.
Who is responsible for issuing Arnona orders?
Since Arnona tax is a form of tax that the local authority imposes on property owners in that authority, there is no single place that is responsible for, or centralizes, all Arnona orders. Each regional council, municipality or local authority publicizes the orders relevant to their specific area on its website.
However, the determination of Arnona tax is subject to the Arrangements in the National Economy (General Property Tax [Arnona] in the Local Authorities) Regulations, 2007.
This prevents local authorities from drastically changing tax rates from year to year, without the approval of the Minister of the Interior and the Minister of Finance.
On what basis is Arnona determined?
The tax on property or parts thereof is based on the use or classification of different sections of the property. For office space, for example, the owner pays Arnona tax at a rate of about 3 times more than for the amount paid for living space. Although local authorities have a limited ability to change the rate of Arnona tax, they do have the ability to change the classification of specific buildings or rooms. Inspectors or officials of the municipality are able to examine and subsequently decide which area may be assigned for living, recreation or storage, and may impose a tax on each square meter accordingly.
What is important to check in regard to a new Arnona order?
As stated, the municipality has the right to classify properties and impose property taxes accordingly. One of the types of classifications is according to regions, usually based on socio-economic status and housing prices. It is possible that your place of residence this year has issued an Arnona order which states that your property is now in an area that is required to pay a different Arnona tax price.
If the property you own is a residence only, the key factor that is important to be aware of is the classification of the property and the possible discounts that it may be eligible for. If you are a business owner, it is important to read the Arnona order carefully. For example, as of January, the Arnona tax imposed on a storage closet on the same floor as a business may be different than the Arnona tax imposed on a storage unit on another floor, to which customers have no access.
Is it possible to look for available Arnona tax discounts?
As stated, each authority issues its own Arnona order, and not every order includes the existing or possible discounts that may be applied. In such cases, it is possible to check the Arnona order of another city – most discounts are determined in various laws and regulations, and are common to all authorities.
Non-profit organizations and institutions are entitled to a discount on office space that they own. Holocaust survivors, Righteous Among the Nations, students, the elderly and single parents are entitled to discounts on their place of residence.
Contact our Arnona experts:
If you would like to receive an Arnona discount that you are entitled to, we will be happy to help. Contact our law office branches in Jerusalem and Tel Aviv for assistance and legal information. We specialize in obtaining exemptions and discounts on Arnona taxes.