J'lem councilwoman renegotiates property tax
Representative of the Jerusalem city council asks Finance Ministry to administer municipal property tax exemptions. If exemptions continue to be granted by municipality, Cohen says, 'the city's economy will collapse'
"We need to take it out of the hands of local councils," Cohen told Ynet, explaining that when local councils exempt citizens from property tax they do so on the basis of salary and the number of people in the household, but do not factor in pensions and government funds.
As such, someone who is not working nor looking for a job might be exempt from paying property tax, but someone who works and makes very little will not.
According to Cohen, the fact that property tax exemptions are granted by municipalities and not by the State causes damage to municipalities and local councils, because they are forced to employ, at large costs, a system of clerks to inspect each request – rather than use existing governmental mechanisms that are appointed to perform such inspections.
In Jerusalem, Cohen argues, expenditures on exemption mechanisms coupled with low rates of payment of property tax pose a serious threat to the city's economy.
According to Cohen, this reality undermines Jerusalem's ability to provide services to its residents. "It's destroying the city's economy. The city is loosing NIS 120-130 million ($30 million) annually and it can't offer any help to those who really need it. No money is given to underprivileged communities, nor invested in cleaning services. In Jerusalem, those who are not exempt are punished twice: both in paying the highest property tax in the country and in getting poor-quality services in return."
Jerusalem Municipality (Photo: Alex Kolomoisky)
In her letter, Cohen suggested to reassign responsibility for granting exemptions from local councils to the hands of governmental institutions, such as the National Insurance Institute and the Tax Authority.
Cohen further suggested examining citizens' ability to work, rather than just whether they are in fact working. "I am more than willing to offer subsidiaries to those who cannot work and to those who are less fortunate, but I am against granting exemptions to those who are working under the table or just sitting at home even though they could work. At this rate, the city's economy will collapse, because the group of people who actually pay these taxes is getting smaller."
If the state indeed interferes in the regulations of property tax, MKs and ministers of haredi parties will probably resist. Cohen insisted that "the exemptions are driven by political considerations and help a very specific sector of the population. We hope that the ministers and the Knesset make the decision to care for everyone."
"This comes in accordance with our demands for affordable home ownership. Why should someone be given a NIS 300,000 ($75,000) discount to buy an apartment without proving to have even tried getting a job? Why is the mortgage of a couple with many children subsidized and that of a hardworking couple who served the country is not? The entire system is twisted, and property tax is part of it. We ask the government to reconsider its priorities and send out this message: we help those who help themselves."
