The property tax protest from 2015.
What has changed since then? (Photo: courtesy of those photographed)
As if the recent wave of price increases wasn't enough: now it turns out that the property tax that each of us pays is also expected to jump and weigh even more on the cost of living.
This, following the public wage agreement that was recently signed between the Treasury and the Histadrut - the cause of an increase in property taxes of approximately NIS 3.5 billion per decade, due to wage increases in the public sector.
We will explain:
in accordance with the established procedure, the property tax imposed on households and businesses is updated at the beginning of each year.
This, over a formula that weighs the increase in the consumer price index and the changes in wages in the public sector.
According to this formula, in the last ten years the property tax has become more expensive by about NIS 4.3 billion.
Of these - 80% for the rate of increase in the public wage index and only 20% for the rate of change in the price index.
The Union of Chambers of Commerce mentions that according to the same formula, the property tax for 2023 has become more expensive, horizontally, by 1.37%, which means a tax increase of about NIS 400 million on the general public and the business sector.
In addition, the Union of Chambers of Commerce warns that the property tax is a generator of inflation and a jump in property tax may lead to another wave of price increases in the economy.
The agreement that was signed
According to the wage agreement in the public sector that was signed between the Ministry of Finance and the Histadrut a few days ago, wages in the public sector will be raised horizontally by 11% and every employee in the public sector will receive a one-time grant of NIS 6,000.
In addition, a unique salary supplement will be given to the education supporters in the local authorities.
According to the published data, the total wage increase in the public sector will be over NIS 12 billion in the coming years.
The Association of Chambers of Commerce states that they welcome the adjustment of the salary for the disadvantaged workers, but warn against the absurdity and according to which, according to the existing law, the salary increase in the public sector will mean a jump in the property tax payments of the business sector and the general public.
Uriel Lin, President of the Union of Chambers of Commerce (Photo: PR)
In light of this, in an urgent appeal to Minister of Finance Bezalel Smotrich, Uriel Lin, president of the Union of Chambers of Commerce, calls for adding to the Settlements Law currently under discussion a section that eliminates the absurd connection between salary updates in the public sector and the property tax that we all pay.
According to Lin, not only are the municipalities collecting higher property taxes in the current situation, they are also not providing better services because of this: "According to the formula that exists today, local authorities have no reason to be more efficient. They can lower the level of services they provide to residents and operating businesses in their territory, and still benefit from an automatic increase in income. This is, of course, an unhealthy situation that works to the detriment of households and the business sector."
The Union of Chambers of Commerce says that the cancellation of the automatic linkage will actually benefit the local authorities and force them to become more efficient, "The authorities will look for other budgetary sources, instead of raising the automatic property tax. This will lead to a policy of business development in their jurisdictions, since the bulk of the property tax originates in the business sector. The profit will be entirely from All residents in the same authority."
Real estate
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real estate
property tax