Israeli Municipalities Request Significant Property Tax Hikes for 2027 Amid Criticism

Local authorities across Israel have submitted requests to the Ministry of Interior seeking exceptional increases in property tax rates for 2027, exceeding the planned automatic adjustment of 3.05%. The requests vary widely, with Azor local council asking for a 13.05% hike, Ramat Gan proposing a 10% increase for residential and commercial properties, and Eilat seeking raises between 1.6% and 8.15% for hotels alongside a 4% increase for vacation homes. Other municipalities such as Kiryat Malakhi, Rehovot, Ashdod, Ariel, Sakhnin, Tel Mond, and Nes Ziona have requested increases ranging from 4.55% to 8.05%. Nazareth submitted the most substantial request, demanding a 33.05% rise in property taxes.

Alongside these requests for hikes, some municipalities have applied for reductions. Or Yehuda has requested a 2% to 12% decrease for commercial properties depending on the type, while Ashkelon seeks a 3.05% reduction for commercial tax rates, effectively canceling the automatic increase for those properties.

Shahar Turgeman, president of the Federation of Israeli Chambers of Commerce, criticized the wave of proposed tax hikes, calling it a warning sign for the economy. He argued that many local authorities treat businesses as a convenient revenue source instead of improving efficiency and managing public funds responsibly. Turgeman highlighted that business property taxes in Israel are already about 40% higher than in European countries, and further increases would harm business growth, employment, competitiveness, and ultimately raise consumer prices. He emphasized that raising property taxes contradicts efforts to combat the cost of living and that businesses should not be seen as emergency cash reserves for municipalities.