Arnona Appeals and case studies

In Israel, property tax payable to the municipality or local council (Arnona) is assessed by the municipality in which a property is located in. While arnona can appear technical and straightforward, the following cases and decisions highlight why having an experienced lawyer representing you is essential to limiting your tax liability. When an “unusual” or unforeseen circumstance arises resulting in property tax appeals, an experienced lawyer will maximize your results while minimizing your stress and possible financial loss.

Municipal Tax Appeal During the Covid-19 Pandemic

In Fatal Hotels Chain v. Jerusalem Municipality, Fatal appealed the tax assessment charged to איק Leonardo Hotel in Jerusalem. Fatal argued that since the hotel was used to house Covid-19 patients and individuals who needed to be isolated from the public, it did not meet requirements for the arnona classification of a “hotel.” Rather, Fatal argued that the hotel functioned as a residence, therefore necessitating a “residential” arnona classification.

The Jerusalem Arnona Appeals Committee held that the Israeli government had contracted with and paid Fatal to house Covid-19 patients and individuals needing to be isolated form the public, so the Leonardo Hotel still retained the legal definition of “hotel” for the purposes of arnona classification. The Court further held that Fatal would reimburse the 13,000 NIS in legal fees which the Jerusalem Municipality paid to defend their assessment of the hotel.

Unpaid Arnona Impeding Property Transfers 

In Kiryat Ata Municipality v. Nili Koren, Nili and the other respondents lived outside of Israel and had inherited property in Kiryat Ata from their late father. Subsequently, the Respondents sold the property to a third party, and the buyer approached the Kiryat Ata municipality to collect a certificate of paid debts required to have the property transfer. However, the municipality refused to provide the certificate, arguing that the property had unpaid arnona and a tax lien was issued against the property.

The Respondents filed a petition to have the arnona and tax lien removed, and the Administrative Affairs Court granted the petition. The court cited that the municipality had only made one attempt to collect the unpaid arnona, rather than the required “substantial” attempt required to collect the debt, especially since the municipality had years to make attempts to collect. The municipality appealed the decision, arguing that an Administrative Affairs Court had no jurisdiction on the issues at hand.

On appeal, the Court examined subjects of law including subject matter jurisdiction, active and passive forms of collection, the doctrine of laches when there is a delay in an attempt to collect fees, public interest considerations, administrative law, and the duty of fairness in complex cases. Ultimately, the Court sided with the Respondents, granting their request to remove the arnona and lien and awarding that their legal fees be paid by the municipality.

Negligence from the Municipality When Calculating Arnona

In Superpharm v. Tel Aviv Municipality, the taking of new measurements of a Superpharm property in Tel Aviv resulted in the realization that the municipality had miscalculated the measurements and overcharged arnona. Furthermore, Superpharm realized that they had been overcharged arnona for several years leading up to this realization. Traditionally, when suing for damages against the assessed arnona, the claimant must sue through the mandated appeals process. However, Superpharm decided to circumvent the arnona appeals, suing the municipality in Magistrates Court in Tel Aviv.

When the Magistrates Court rejected the complaint, Superpharm appealed to the district court in Tel Aviv. The district court accepted the appeal, holding that the case at hand was about suing for negligence on the part of the municipality, rather than challenging the arnona assessment itself. Accordingly, the district court set a new precedent, allowing negligence claims against municipalities to be brought directly to trial courts as opposed to challenging the assessment mistake through the arnona appeals process.

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The above cases emphasize the necessity of having an experienced lawyer represent you with all your Arnona appeals needs. By hiring Decker, Pex, Levi, you can be rest assured that your case will be zealously handled by knowledgeable advocates in a constantly evolving area of law.

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