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Is an empty property liable to the payment of property taxes and at what rate? - Walla! Sentence

2021-07-27T04:31:07.580Z

The recent corona period has led to many properties being left empty and still being taxed. The following article puts in order the question of whether it is possible to charge a property that is not used for property taxes and if so, for how long and at what rate?



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Is an empty property liable to the payment of property taxes and at what rate?

The recent corona period has led to many properties being left empty and still being taxed.

The following article puts in order the question of whether it is possible to charge a property that is not used for property taxes and if so, for how long and at what rate?

Tags

  • property tax

Adv. Talia Brazani, in collaboration with Zap Legal

Thursday, 15 July 2021, 12:40 Updated: 12:47

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Residential building (Photo: ShutterStock)

Gal Asset owes property taxes.

almost.

The property tax payments paid to local authorities in accordance with section 8 of the Arrangements in the State Economy Law are determined according to the classification of the property and its size.



By law, the classification is determined by its use.

However, there are situations where the property is not used at all, especially as happened in the Corona year, when many businesses found themselves standing idle unused: businesses moved to work from home, malls, restaurants and cafes remained closed.

Whether in the corona period or in another period or in other circumstances, if your business has stood or is standing unused, you may be entitled to a tax exemption.

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To the full article

Exemption from property tax on a new vacant property

First, if it is a new property purchased that has not yet been used, according to Regulation 12 of the Arrangements Regulations in the State Economy (General Property Tax in Local Authorities), 2007, it can be exempted for a period of up to 18 months. This is only if it is a new property. , That is, a property that they have not yet lived in. The 100% discount is valid for 12 months if the property is not used, and then can be extended for an additional 6 months.

Exemption from property tax on an empty property that is not new

According to Regulation 13 of the Arrangements Regulations in the State Economy, an exemption from property tax (100% discount) can be obtained for "a property completely empty of any person and object, and not used" for a period of one month which can be extended up to a period of 6 months.

This discount is one-time for all owners.

After half a year, you can try to request an extension of the discount.

Classification of an empty property after the discount period

After the tax deduction period, whether 18 months or 6 months, etc., the question arises at what rate the property should be charged.



Over the years, the court has discussed this issue extensively.

In previous rulings, in the early 2000s, the court ruled that since an empty property causes economic damage in the form of loss of rent and does not require services from the municipality / local authority, then this property should be charged at the cheapest rate among the permitted uses of the property.

This approach of the court is intended to take into account the owners of the property and not to punish them for not using it.



In a ruling given in 2018 in Baram 991/16, the Tel Aviv Municipality sought to apply the classification of the property to an empty property according to the classifications of the property that appear in the building permit and thus, invalidate lower rates that appear in the construction plan and could significantly reduce property tax payment.

What uses of the property exist for the purposes of classifying the property and determining the property tax rate?

According to the regulations, there are 12 main classifications for determining property tax rates, from which the sub-classifications are derived.

For example, within the classification of offices, services and commerce, there are sub-classifications of restaurants, cafes, malls, etc.

In determining the tariff, four main characteristics of the property are



examined

:

1. The type of property


2. Size in square meters


3. The use (for example - residential, commercial, offices)


4. The area where the property is located (for example - commercial area, residential neighborhood, luxury neighborhood, etc. ).



Thus, to determine the classification of the property direct bearing on the amount of the tariff which the property will be charged.

What are the implications of the halakhah given in 2018?

In the rule of Baram 991/16 Africa Israel Investments Ltd. v. Tel Aviv Municipality, the Supreme Court ruled that the assessee must be charged according to the rate he would have had to pay if he had operated the property, in accordance with the building permit.

This determination has created a problem of charging the property at the rate of the cheapest use since the classification is chosen according to the uses that appear in the building permit which sometimes does not include cheaper uses that may exist in the land plan.

Thus, in fact this ruling often contradicts the previous case law of the Supreme Court and allows local authorities to charge the property owners who own the property without using it to pay a relatively high rate.

In conclusion

There are various exemptions in the regulations of arrangements in the state economy that allow for a full exemption and discounts from property taxes in the event of non-use of the property (empty property).

However, if you do not meet the conditions of the discounts, you can still apply for the property tax charge at the cheapest rate in accordance with Supreme Court law.

However, this rate will be calculated according to the rates and classifications of the property that appear in the building permit which can increase the property tax charge.

In case of non-use of the property and refusal of the municipality to grant a significant tax deduction it is advisable to consult a lawyer who will be able to examine all the details of the case and plan the right and appropriate way to reduce property tax payment as much as possible.



Adv. Talia Brazani

specializes in real estate



Phone

: 054-4256510



Article

courtesy of Zap Legal



The information presented in the article does not constitute legal advice or a substitute for it and does not constitute a recommendation for taking proceedings or avoiding proceedings.

Anyone who relies on the information in the article does so at his own risk

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Source: walla

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