TL;DR:
- Arnona is Israeli municipal property tax, billed annually (typically split into 6 bi-monthly payments).
- Olim discount: 70-90% off for up to 12 months within the first 24 months from Aliyah.
- Tenant pays, not owner — unless vacant.
- Discounts require application — they are NOT automatic.
- Short-term rentals (Airbnb) get reclassified to commercial Arnona, often 4-6x higher.
What Arnona Funds
Garbage collection, street cleaning, public parks, street lighting, public schools' physical infrastructure, public libraries, local emergency services. Unlike US property tax, Arnona is NOT based on property market value — it's based on physical size and use.
How Arnona is Calculated
Formula: Area (sqm) × Rate per sqm × Use coefficient × Zone coefficient
- Area: physical floor area; includes balconies (partial), excludes parking and storage in some municipalities.
- Rate per sqm: set annually by each municipality. 2026 residential: typically ₪40-90/sqm/year.
- Use coefficient: residential = 1.0, commercial = 3-6x, industrial = 4-8x, vacant land = lower.
- Zone coefficient: central neighborhoods slightly higher than peripheral.
The Oleh Discount
Per the Discounts in Arnona Regulations (1993):
- Duration: 12 months total within the first 24 months from Aliyah date.
- Amount: 70-90% reduction, exact level set by municipality.
- Application: at the local municipality (iriya) with Teudat Oleh, Teudat Zehut, lease/ownership proof, and proof of move-in date.
- Months can be split: e.g., 6 months in year 1 + 6 months in year 2.
Critical: discounts are NOT retroactive beyond the start of the application month in most municipalities. Apply immediately on moving in.
Other Discounts Stack
- IDF reservists: 80-100% during active Miluim periods.
- Single parents (chad-horit): 25-30%.
- Seniors (gil hazahav): 25-30% depending on income test.
- Disabled: up to 80% depending on disability rating.
- Bituach Leumi income-support recipients: 70%.
An oleh who is also a single parent can stack the discounts within rules.
Disputing the Arnona Assessment
Two common errors:
- Wrong square meters. Olim moving into older buildings frequently inherit incorrect Tabu measurements. A surveyor (mode'ed) can produce a new measurement; the objection (hasaga) process refunds back-Arnona.
- Wrong use classification. A home-office mistakenly classified as commercial Arnona pays multiples of the residential rate.
Objection deadline: 90 days from the assessment notice. Appeal to the Arnona Appeal Committee if denied.
Short-Term Rentals (Airbnb)
Many municipalities (Tel Aviv leading the way) reclassify properties used for short-term tourism rental as commercial Arnona — often 4-6x the residential rate. Combined with new short-term-rental licensing, the effective tax burden has risen sharply. See our short-term rental tax guide.
Payment Mechanics
- Billing: annual assessment, paid in 6 bi-monthly installments.
- Discount: 2% for paying full year upfront (most municipalities).
- Direct debit (hora'at keva): automatic and standard.
- Late payment: 1.5% monthly indexation plus collection action.
Not sure how this applies to you?
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