Haifa Court Rejects Kiryat Yam’s 1.2 Billion Shekel Development Levy Demand on Rafael

The Haifa District Court ruled that while Kiryat Yam municipality can charge Rafael development levies, the city’s demand for 1.245 billion shekels was unreasonable and based on flawed calculations. The dispute arose after about 6,000 dunams of Rafael’s 6,800-dunam site, known as the David Institute, were incorporated into Kiryat Yam’s municipal boundaries in 2018. Previously, the land was classified as unassigned Galilee territory outside any local authority.

Following the boundary change, Kiryat Yam billed Rafael for development levies covering road paving, drainage, and public open spaces. Rafael contested the charge, arguing it never benefited from the city’s infrastructure and that the levy calculation was defective. Rafael highlighted that the city collects about 2.7 million shekels annually in levies but sought a payment equivalent to over 400 years of such fees, questioning the necessity of the sum.

Judge Ron Sokol found the city’s calculation flawed because it was based on four densely built residential neighborhoods, ignoring that only about 270 dunams of Rafael’s 6,000 dunams are developed. He ruled that applying residential levy rates to Rafael’s largely undeveloped site was unreasonable and inconsistent with the purpose of funding only necessary municipal infrastructure without enriching the city’s coffers.

The court therefore canceled the 1.245 billion shekel demand, instructing the city to revise its calculations. Kiryat Yam stated it respects the ruling affirming Rafael’s obligation to contribute to municipal development costs and will adjust the levy accordingly while continuing to enforce payment for infrastructure use. The municipality emphasized its commitment to protecting residents’ rights and ensuring all users of city infrastructure share development expenses.