This is a common and important financial question for homeowners in Israel during a major renovation. The general rule is that you remain liable for Arnona (municipal tax). However, in defined circumstances a property that is empty or genuinely unfit for use can qualify for a discount or exemption. The exact rules are set by the Municipal Corporations Ordinance and municipal by-laws, and they differ by municipality, so this is general information rather than legal or tax advice — confirm the specifics with your local authority and a qualified professional.
Arnona is generally levied on the holder/user of a property. Simply renovating is not automatic grounds for relief. Broadly, two distinct reliefs may be relevant: (1) an “empty property” discount — for a property that is completely empty of any person and object and unused, typically granted for a limited period (commonly up to about six months) and usually only once for the whole period of ownership; and (2) a separate exemption for a building that has been destroyed or damaged to the point that it is unfit for use, which under the Ordinance can run for a longer period (often an initial multi-year period, then a reduced rate), again subject to proof and municipal approval.
In either case you must formally apply to your local municipality’s arnona department and provide evidence of the property’s condition — typically photographs of the gutted/empty property, copies of construction permits, and a letter from your architect or contractor describing the scope and timeline of the works. The municipality may inspect before approving. Importantly, for a property undergoing renovation the relief generally applies only from the date the claim is submitted and is not backdated, so it is essential to apply at the right time (before the works render it claimable) rather than after the fact. Because the precise category, duration and conditions vary by municipality and depend on the specific facts, obtain confirmation from the municipality and professional advice before relying on any exemption.
Too Long; Didn’t Read
- You are normally liable for arnona even during remodeling.
- A short “empty property” discount (commonly up to ~6 months, usually once per ownership) may apply if the property is completely empty and unused.
- A separate, potentially longer exemption exists for a building that is genuinely unfit for use (destroyed/damaged), subject to proof and municipal approval.
- You must apply formally with evidence (photos, permits); for renovations relief is generally not backdated, so apply at the right time.
- Rules vary by municipality — confirm with the local authority and a qualified professional; this is not legal or tax advice.
For deeper guidance on this topic, see our Israel rental listings and renting guidance.
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