Israeli Municipalities Seek Property Tax Hikes Beyond Annual Adjustment

Several Israeli municipalities are requesting property tax (Arnona) rate increases beyond the standard annual adjustment set to take effect in January 2027. The national adjustment, calculated based on changes in the consumer price index and public sector wages, has been fixed at 3.05% for 2027. However, cities like Rehovot, Ness Ziona, Eilat, and Haifa are seeking additional increases for specific property types, pending approval from the Interior and Finance Ministers.

Rehovot has proposed an 8% hike for some residential properties, aiming to gradually reduce historical tax disparities between different areas within the city. The municipality claims that approximately 66% of its residents currently pay significantly higher Arnona than others, even on the same street. This proposed increase is contingent on ministerial approval and would begin in January 2027 if granted.

Ness Ziona is requesting an additional 2.5% increase for residential properties and 4.5% for other property types, on top of the 3.05% national adjustment. In Eilat, the city council approved a 2027 Arnona order that includes the national update and specific changes for commercial vacation apartments and hotels. The city is seeking an additional 4% on vacation apartments used for commercial purposes and is also adjusting taxation for hotels by unifying assessment zones and area tiers. For hotels, if the total increase exceeds 10%, it will be capped at 10% for 2027, with the remainder deferred to 2028.

Haifa has also published documents related to its request for an exceptional Arnona permit for 2027, though the city notes that its published Arnona order is subject to ministerial approval. The final tax amounts for residents will depend on each municipality's specific Arnona order, property classification, size, and the approvals granted by the relevant ministers.