Arnona
OLIM · ADVICE
ALIYAH ADVISORY
Arnona,
Made Simple
Israel’s municipal property tax — how it works, what you
should be paying,
and the olim discount that saves new immigrants thousands.
Published by Olim Advice · olimadvice.com
§ 01 · START HERE
The tax that
puzzles everyone.
Arnona (ארנונה) is the municipal tax that funds your local services — but it works unlike property tax almost anywhere else. It is charged on the size and type of a property, not its market value. Grasping how it is calculated, who pays, and which discounts apply — especially the generous one for new immigrants — is essential for anyone living in Israel.
Every property pays arnona — residential, commercial, industrial, even vacant land — and the money funds street maintenance, rubbish collection, parks, local education, culture and the general running of the city. Because each municipality sets its own rates against its own budget, the same apartment can cost very different amounts in different cities.
THE HEADLINE FOR NEWCOMERS
If you have made aliyah, the olim discount can cut your arnona by 70–90% — for one 12-month period, used once within your first two years in Israel. It is not applied automatically, and it is not retroactive. Claiming it, and timing it well, is one of the simplest, highest-value things a new immigrant can do. Section 07 covers exactly how.
Arnona at a glance
Key terms
ארנונה arnona — municipal property tax · מגורים megurim — residential classification · הוראת קבע hora’at keva — standing bank order · תעודת עולה teudat oleh — immigrant certificate · ערר arar — a formal appeal.
§ 02 · THE FORMULA
How arnona is
calculated.
Forget market value. Israeli arnona is built from floor area and how the property is classified — nothing more complicated than that at its core.
The basic formula
Arnona = property size (m²) × rate per m² × classification. Each municipality sets its own rate per square metre, and that rate changes with the property’s classification — residential, commercial, office, industrial and so on.
Property classifications
| Classification | Typical effect on rate |
|---|---|
| Residential (megurim) | The most common — generally the lowest rates |
| Residential, low standard | Older or substandard housing — sometimes reduced |
| Commercial | Shops and restaurants — often 3–4× residential |
| Office | Professional offices — higher than residential |
| Industrial | Factories and industrial facilities |
| Vacant land / mixed use | Undeveloped plots; combined residential + commercial |
How your size is measured
The municipality measures and records the property’s area. This usually covers interior living space plus roughly half of any balconies (mirpesot), and in apartment buildings a proportional share of common areas may be included. If you think you have been mismeasured, you can request a reassessment — but you will need evidence, and sometimes a professional measurement. A wrong size is the most common successful ground for appeal (see Section 08).
§ 03 · WHAT IT COSTS
How much does
it cost?
There is no single national rate — costs swing widely by municipality and by size. As a broad picture, central cities with extensive services charge more; peripheral cities and development towns charge less, though sometimes with fewer services.
Rough city comparison
For a 75 m² apartment, illustrative bi-monthly figures look roughly like this. Treat them as ballpark only — actual rates vary by neighbourhood and change every year.
| Area | ≈ Bi-monthly (75 m²) | Character |
|---|---|---|
| Tel Aviv | ₪2,400–2,800 | Large city, extensive services, higher rates |
| Jerusalem | ₪2,000–2,400 | Somewhat lower; varies by neighbourhood |
| Peripheral cities | Lower still | Be’er Sheva, Ashdod, Netanya & similar |
| Regional councils | Often much lower | Suburban / rural; sometimes fewer services |
Worked examples
Tel Aviv — 70 m² at ≈23 ₪/m² bi-monthly: 70 × 23 = ₪1,610 bi-monthly, about ₪9,660 a year.
Peripheral city — 90 m² at ≈16 ₪/m² bi-monthly: 90 × 16 = ₪1,440 bi-monthly, about ₪8,640 a year.
Note how a larger flat in a cheaper city can cost less than a smaller one in Tel Aviv — the rate per metre matters as much as the size.
§ 04 · BILLING & PAYMENT
Billing and
payment.
Most municipalities bill arnona every two months — six bills a year. Each bill shows the period, your property size, the rate per metre, any discounts applied, and the total due.
Ways to pay
- Hora’at keva (standing order) — automatic bank transfer, the most common method; usually earns a small discount (around 2–3%).
- Credit card — one-off or recurring, often via the municipality’s website or app.
- In person at the arnona office, by manual bank transfer using the bill’s details, or at the post office in some municipalities.
Timing and penalties
Bills arrive a few weeks before they are due and must be paid by the printed date. Late payments attract interest — typically around 4–5% plus CPI linkage — which compounds quickly. Most people set up a standing order to guarantee on-time payment and pick up the small discount at the same time.
THE SIMPLEST MONEY-SAVER
Set up a standing order the moment your account is open. It removes any risk of penalties, secures the ~2–3% discount, and means one less bill to remember six times a year.
§ 05 · LIABILITY
Who actually
pays.
The legal liability sits with whoever holds the property rights — but in practice the arrangement depends on whether you own or rent, and on what your contract says.
Owners
Owners are directly responsible: the municipality bills them and they pay it.
Renters
Technically the owner is liable, but most year-long residential leases pass arnona to the tenant. Three patterns are common:
- Tenant pays directly — the contract transfers responsibility; the tenant registers with the municipality and is billed directly. Most common in year-long rentals.
- Landlord pays, rent includes arnona — less common; seen in high-end or short-term lets.
- Landlord pays, tenant reimburses — increasingly rare, as it creates admin hassle.
IF YOU RENT, REGISTER IN YOUR NAME
Your lease should state plainly who pays arnona. If it is you, register with the municipality’s arnona department so the bills — and crucially any olim discount — come to you, not the landlord. When the lease ends, transfer the registration back to the landlord or the next tenant.
Business tenants
For commercial space it depends on the lease: some include arnona in the rent, others require the tenant to pay separately. Commercial rates are substantially higher than residential.
§ 06 · RELIEF
Discounts and
exemptions.
A range of discounts can cut a bill meaningfully — and they are rarely applied without you asking. It is always worth checking what you qualify for at your municipality.
| Who | Typical relief |
|---|---|
| Senior citizens | Discounts from ~age 70, rising with age (some 50% over 80) |
| Low income | Income-support recipients: often 70–90% in some municipalities |
| Disabled persons | ~10–50% depending on disability level and city |
| Single parents | Discounts in some municipalities, subject to criteria |
| Large families | Reductions in certain municipalities |
| Holocaust survivors | Substantial discounts or full exemption in most cities |
CAN YOU COMBINE DISCOUNTS?
Usually not additively. Where you qualify for more than one — say, an oleh who is also a senior — most municipalities give you the more beneficial single discount, not both stacked. Rules on stacking vary, so confirm with your municipality.
Other categories
Students may qualify in some municipalities with proof of full-time status. Properties modified for disabled residents, or certain assisted-living facilities, may receive partial or full exemptions. As always, the detail is municipality-specific.
§ 07 · THE BIG ONE
The olim
discount.
This is the big one for new immigrants — but it works differently from how many people imagine. It is not a discount that tapers down over five years. It is a single 12-month discount you use once, at a time of your choosing, within your first 24 months in Israel. Anyone who made aliyah and holds a teudat oleh is eligible (returning minors — ktinim chozrim — are generally not).
How the benefit actually works
| Feature | The rule |
|---|---|
| How much | Customarily 70–90% off — the exact rate is set by your municipality |
| For how long | One continuous 12-month period |
| When | Used once, within the first 24 months (2 years) after aliyah |
| On what area | The first 100 m² of your home; area above 100 m² is prorated at full rate |
| Where | Your primary residence only, with the bill in your name |
So a family can choose to “spend” their 12 months whenever it helps most within that two-year window — for example, once they have moved into a longer-term home rather than during a brief first sublet.
EXAMPLE — A 90 M² HOME, ₪12,000 ANNUAL ARNONA, AT A 90% RATE
The whole 90 m² is within the 100 m² cap, so the full bill qualifies. Over the 12-month discount period you pay about ₪1,200 instead of ₪12,000 — a saving of roughly ₪10,800 in that year.
If the rate in your municipality were 70%, you would pay about ₪3,600 and save ₪8,400. Either way it is a one-time, single-year benefit — not a saving that repeats annually.
How to claim it
- Get the bill into your name first. Use the municipality’s “change of holder” process — the discount only works if the arnona account is in the oleh’s name, not the landlord’s.
- Apply actively — it is not automatic. Submit the request (usually an online form) at your municipality; each city has its own procedure and deadlines.
- Bring: teudat oleh, teudat zehut, and your rental or ownership contract (a lease of at least 12 months is typically required).
- Time it deliberately. The benefit is generally not retroactive and must be used within the first 24 months — so pick the 12-month window that gives the biggest saving and don’t let the two-year deadline lapse.
§ 08 · APPEALS
Appealing your
assessment.
If a bill looks wrong, you have a right to challenge it. Most successful appeals come down to measurement or classification errors, and many are resolved at the municipal level with good documentation.
Common grounds
- Incorrect size — the most common winning ground; a mismeasured property means an inflated bill.
- Wrong classification — e.g. billed as commercial when it is residential, which dramatically changes the rate.
- Discount not applied — if you qualify for relief that is not showing, raise it immediately.
- Duplicate billing — administrative errors occasionally bill the same property twice.
The process
Start informally: contact the arnona department — many issues are settled there. If that fails, file a formal written appeal (arar) to the municipal assessment committee with all supporting documents (measurements, photos, prior bills). If you disagree with their decision, you can escalate to the regional appeals committee and, ultimately, the courts.
DOCUMENT BEFORE YOU DISPUTE
Whatever the ground, an appeal lives or dies on evidence. Gather measurements, dated photos and your previous bills before you file — a well-documented measurement appeal is often resolved quickly and in your favour.
§ 09 · EDGE CASES
Special
situations.
Vacant properties
Empty residential properties still owe arnona, sometimes at reduced rates. If a property will be empty for a long stretch, ask whether your municipality offers a reduced rate for documented vacancy.
Under construction or renovation
Properties being built or renovated may qualify for a temporary reduction or deferral — typically requiring the right permits and notice to the arnona department.
Mixed-use
If part of a home is used commercially (a home office or a business run from the property), each portion is generally taxed at its own rate, which makes the classification more involved.
Shared ownership
With co-owned property (inheritance or partnership), all owners are jointly responsible. The municipality usually bills one owner but can pursue any owner for the full amount.
Moving mid-period
Liability should transfer on the move date. In a purchase, the agreement (heskem rechisha) should fix the exact arnona transfer date; when ending a lease, make sure the registration moves back to the landlord or on to the next tenant.
NON-PAYMENT ESCALATES — QUICKLY
Unpaid arnona accrues interest and CPI-linked penalties from day one (roughly 4–5% plus indexing). Sustained non-payment can lead to collection proceedings, liens that block a sale or refinance, garnishment, and — in extreme, long-term cases — even travel restrictions. If you are buying, check there is no outstanding arnona debt, because it transfers with the property.
§ 10 · IN PRACTICE
Managing
arnona well.
Arnona is a real line in a housing budget — a little attention keeps it from becoming a headache.
- Budget for it properly — if you pay separately from rent, plan for six bi-monthly bills a year.
- Claim every discount you are entitled to — the olim discount alone can save thousands annually.
- Set up a standing order — on-time payment, no penalties, plus the small discount.
- Review each bill — check size, classification and applied discounts; errors happen and catching them early prevents overpayment.
- Plan for annual rises — municipalities typically lift rates ~2–5% a year.
Where to get help
| Resource | What they help with |
|---|---|
| Municipal arnona department | Your bill, discount applications, appeals — start here |
| Citizens’ rights organisations | Disputes and understanding your rights |
| Olim absorption centres | Registration and discount applications for new immigrants |
| University legal-aid clinics | Serious disputes |
| Non-profit financial counsellors | Negotiating payment plans on accumulated debt |
IN CLOSING
Know the bill
before you sign.
Arnona is one of the easiest costs to overlook when you are focused on the price of a property — and one of the easiest to get wrong. Whether you are renting for now or buying, knowing roughly what the municipality will charge, and claiming the discounts you are owed, keeps the running cost of a home from surprising you later.
For new immigrants the message is simple: get the arnona bill into your name, and use your one-time 12-month olim discount within your first two years — timed for when it saves you most. It is among the most valuable, least complicated benefits available to you — and it is gone if you do not ask.
FOR THE WIDER PICTURE
Olim Advice publishes plain-English guides on every part of the aliyah journey — from the Tik Aliyah through banking, health cover, schools and the running costs of a home. Browse the full library at olimadvice.com, or join the WhatsApp circle below to ask a question and compare notes with other olim.
This guide is general information about arnona in Israel and is not legal, tax or financial advice. Rates, classifications, discount schedules and penalties are set locally, vary by municipality and change annually; the figures here are illustrative only. Confirm current details with your municipality’s arnona department before acting. © Olim Advice.
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