New MK Launches Campaign to Abolish Property Tax Fund
Translated & summarized from Maariv by baba
Member of Knesset Oshrat Gani Gonen is campaigning to abolish the property tax fund, arguing it harms local authorities and widens economic gaps. Enacted in 2023, the fund requires wealthier municipalities to contribute to a pool that grants funds based on new housing construction. Data indicates that major cities like Tel Aviv are set to receive significant amounts, while others must contribute. Gonen believes national goals should be state-funded, not at the expense of local government autonomy.
The story in 5 lines · by baba
- MK Oshrat Gani Gonen is campaigning to abolish the property tax fund, citing harm to local authorities.
- The fund, established in 2023, requires strong municipalities to contribute to a pool for housing grants.
- Gonen argues the fund exacerbates economic disparities and fails to address the housing crisis.
- Tel Aviv is projected to receive nearly NIS 30 million from the fund for 2025.
- Haifa and Petah Tikva are among the cities required to contribute significant amounts to the fund.
Newly sworn-in Member of Knesset Oshrat Gani Gonen has launched a campaign to repeal the property tax fund, arguing it undermines local authorities' independence and exacerbates economic disparities. Gonen, formerly head of the Drom HaSharon Regional Council, contends that the fund, enacted in 2023 as part of the Arrangements Law, has failed to address the housing crisis or accelerate construction. Instead, she claims, it penalizes municipalities that invest in economic development and hinders their ability to provide essential services.
The fund mandates stronger municipalities to contribute up to 28% of their annual business property tax growth to a central pool, with lower-income municipalities contributing less. This pool then provides grants based on newly built housing units. Gonen argues this creates an economic distortion, rewarding municipalities with existing development demand, like Tel Aviv and Bnei Brak, while leaving peripheral areas behind. She asserts that national goals like reducing inequality and encouraging construction should be funded by the state budget, not by local authorities' coffers.
Data for 2025 suggests a complex picture. Tel Aviv, which previously opposed the law, is projected to receive nearly NIS 30 million from the fund for 2025, in addition to approximately NIS 21 million for 2024. Jerusalem is expected to receive about NIS 18 million, Beit Shemesh NIS 11.3 million, and Bat Yam NIS 10.7 million. Conversely, Haifa must contribute about NIS 10 million, and Petah Tikva NIS 4.6 million. According to Globes, Tel Aviv benefits because its housing unit grants reached approximately NIS 30.6 million, while its contribution was only about NIS 691,000, possibly due to a clause exempting non-residential property tax growth exceeding 20%.
While the current sums are relatively small compared to the municipalities' overall budgets, Globes estimates they will grow over time. These figures support Gonen's claim that the fund directs money to strong cities with existing demand. However, it remains unclear if the fund itself has directly increased construction volume.