Israeli Hotels Sue Jerusalem Municipality Over Property Tax for Displaced Guests
Translated & summarized from Bizportal by baba
Five Israeli hotel chains are suing the Jerusalem Municipality, seeking to reclassify their properties as residences for tax purposes while hosting evacuees from conflict zones. The hotels argue their operations changed significantly from October 2023 to the end of 2024, serving as homes for displaced families. The municipality is demanding full hotel property tax, totaling millions of shekels, a move the chains call "outrageous" and contrary to the reality of their wartime service.
The story in 6 lines · by baba
- Five Israeli hotel chains are petitioning the Jerusalem District Court to classify their properties as residences for tax purposes.
- The hotels hosted thousands of evacuees from conflict zones from October 2023 through the end of 2024.
- The chains claim their operations shifted to resemble residential living, not typical hotel services.
- Jerusalem Municipality is demanding full hotel property tax, amounting to millions of shekels.
- The hotels contrast Jerusalem's stance with Tel Aviv, where some agreements have been reached.
- An appeals committee rejected the hotels' claims and imposed 100,000 shekels in expenses.
Five Israeli hotel chains have filed a petition with the Jerusalem District Court, demanding that their properties be classified as "residences" rather than "hotels" for property tax (arnona) purposes during the period they hosted evacuees from conflict zones. The hotels argue that from October 2023 through the end of 2024, their operations shifted significantly, serving as long-term housing for thousands of displaced families from southern and northern Israel, including communities like Sderot, Kiryat Shmona, and the Gaza envelope.
These chains, including Grand Court, Isrotel, Fattal, Migdalot Tel Aviv, and Prima, claim that while they took pride in assisting the nation during a crisis, their service levels and operational focus changed, resembling residential living more than typical hotel services. They state that the state compensated them for hosting evacuees, but not at the rate of their usual business.
Despite this shift, the Jerusalem Municipality is insisting on collecting full hotel arnona, which the chains estimate amounts to millions of shekels in back taxes. This contrasts with Tel Aviv, where the municipality has reportedly reached agreements with some hotels regarding similar issues.
The hotels are appealing a decision by an appeals committee that rejected their claims and even imposed 100,000 shekels in expenses on them. The chains contend that the committee ignored the security reality in Israel and the hotels' contribution, and that the committee's decision felt out of touch with Israeli reality. They also claim the committee unfairly dismissed their case, suggesting that to prove a change in operations, evacuees should have signed leases and hotel management should have been dismissed, which the hotels deem absurd.