Urban Renewal Tax Exemption for Safe Rooms Upheld by Central District Appeals Committee
The Central District Appeals Committee for Compensation and Betterment Levy has ruled that a signed evacuation-reconstruction agreement does not disqualify a project from receiving a tax exemption on the construction of safe rooms (Mamadim). This decision benefits contractors by extending the exemption to newly sold units.
The ruling came in response to an appeal filed by the Yehud-Monosson Local Planning and Building Committee regarding a project in the Mohilever complex. The committee's appeal was entirely rejected, leaving the original betterment levy at NIS 970,575, significantly lower than the approximately NIS 3.4 million calculated without the exemption.
The local committee had argued that the exemption should not apply to safe rooms in the developer's units, especially since agreements were signed after the betterment plan was approved. However, the appeals committee determined that the agreement should be viewed as part of the overall evacuation-reconstruction project, even more so than in previous cases involving combination agreements where the exemption was recognized.
Notably, the decision was unanimous, including from appraiser Nava Sircus, who had previously dissented in similar cases. This ruling addresses a legal dispute over betterment levy exemptions for safe rooms when evacuation-reconstruction agreements are signed post-plan approval, a matter currently under review by the Supreme Court.
Another issue raised concerned a previous ruling, the Noa Lev case, which the local committee argued should have been applied by the appraiser. The appeals committee dismissed this claim, stating it was not raised before the original appraiser and that the appeals stage is not for re-litigating calculations.
Lawyer Anat Biran, representing the development company, stated that the decision is crucial for many evacuation-reconstruction projects, potentially saving millions and impacting their economic viability. She emphasized that the committee's stance on the timing of agreement signing and the handling of new claims at the appeal stage are significant takeaways.
