Court Orders Kiryat Ata to Revise Property Tax Rate for Nursery

The Haifa District Court has ordered the municipality of Kiryat Ata to revise its property tax (Arnona) decree, ruling that a specific rate set for a nursery was unreasonable and discriminatory. The nursery's annual tax bill had surged from NIS 31,000 to NIS 4.85 million within a single year. The nursery, Meshelot Shafir Ltd., operates on a large, approximately 98,000 square meter area that was previously under the jurisdiction of the Mateh Asher Regional Council before being annexed to Kiryat Ata as part of border changes initiated by the Interior Ministry.

Kiryat Ata designated the annexed areas as "Zone 40" in its property tax decree, imposing a rate of NIS 49 per square meter for nurseries and greenhouses in this zone. This rate was significantly higher, about 2.5 times, than the approximately NIS 20 per square meter charged to businesses with the same classification in other parts of the city. The municipality argued that the operation constituted "industrial agriculture" and that classifying it as a "greenhouse/nursery" was actually more lenient than classifying it as industrial, which would have incurred an even higher tax.

The nursery contended that the rate was exorbitant and violated the city's commitment to maintain existing tax rates for annexed agricultural lands. This was the second legal challenge filed by the nursery; an earlier one resulted in a court order for the city council to reconsider the decree, which it then re-approved without changes.

Vice President Judge Tamar Neot Fry rejected the claim of a broken commitment regarding agricultural land rates but accepted the nursery's challenge to the specific rate. She ruled that the 250% disparity between Zone 40 and other areas was unreasonable, unjustified, and discriminatory, stating the rate appeared "almost personal" and designed to fit the specific nursery. The judge emphasized that the city council's deliberations did not adequately explain the justification for a rate applied to only one taxpayer.

The court ordered the cancellation of the Zone 40 rate and mandated the city to amend its decree, also ordering Kiryat Ata to pay NIS 10,000 in legal expenses. Attorney Alex Katz, a founding partner at Katz Geva Itskovitz, commented that the court's decision sends a significant message against using property tax decrees to tailor rates for specific businesses, serving as a warning to local authorities and a tool for taxpayers facing drastic tax changes.