(haipo) Is it possible for a store owner in the Grand Canyon to pay less property tax than a store owner on Herzl Street or HaChalutz in Hadar? A test we conducted reveals that this is indeed the case. While the Grand Canyon is in assessment zone B, where the rates are lower, the stores in Hadar are classified in assessment zone A, which is higher. This means that a store owner in Hadar pays about 380 NIS per square meter, while a store owner in the Grand pays only about 340 NIS. This gap arouses resentment among Hadar merchants, who feel that they are bearing a heavier burden, despite much less infrastructure and services.
What is property tax and how is it calculated?
Property tax is an annual mandatory tax imposed by local authorities on property owners, both residential and commercial. Unlike other taxes based on income or profit, property tax is calculated based on the characteristics of the physical property: area, location, and classification. The formula for determining rates takes into account the assessment area, market conditions, and type of property.
Property taxes for businesses – a heavier burden
While residential property taxes are considered high, business property taxes are significantly higher. They are imposed on commercial real estate: stores, offices, and industrial facilities, and are intended to generate revenue for the local authority to maintain infrastructure and public services. Each authority sets the regulations according to its own policy, and is responsible for collecting the tax.
Fury among citrus merchants
A store owner on Herzl Street in Hadar said that there is great resentment among the merchants. "It is unthinkable that we would pay more than a store owner in the Grand," she said. According to her, the store owners in the mall enjoy regulated parking, toilets, cleaning and air conditioning, while the merchants in Hadar are forced to clean the street themselves and take care of the store's surroundings. "A store owner in the Grand doesn't go out with a broom to clean the mall. We do," she added. It should be noted that if you leave the Grand for Simcha Golan Street, the property tax immediately goes up. You return to the most successful mall in the city, and the property tax immediately goes down.
"One of the important opportunities for the beginning of Hadar's rehabilitation is under the spotlight and 'no one is paying attention,'" says Hayom Strategic Advisor, Dr. Yariv Sagi"Tomorrow morning, we can rebalance one of the city's most severe property tax injustices, and truly empower those who need it and take a little more than those who have to give. The fact that the Grand Canyon has enjoyed a discount to this day at the expense of Hadar Carmel should be a red flag for decision-makers. This is one of the most severe property tax distortions in the history of the city of Haifa, apparently. And what is the significance of lowering Hadar's property tax classification on several Hadar streets from A to B? No less than a 25% reduction! So instead of giving businesses in Hadar discounts on poor people, maybe we can give them what they deserve and thus help empower them and make a little more progress towards the restoration of the neighborhood!"
Comparison between the city's tax zones
The disparities between the tax zones in Haifa are not new. Zone A is considered more expensive, while Zone B is cheaper. This means that a store owner in Hadar pays more than a store owner in a modern mall. The obvious question is whether there is a direct relationship between the stores' income and the property taxes they are obligated to pay.
Haifa is considered one of the cities with the highest property taxes in Israel, including for residential purposes. This is a historic decision that led to residents of Savyoni Danya, for example, who live next to residents of Nesher, paying almost double the amount of property taxes. Furthermore, residents of Haifa pay more than residents of Tel Aviv, but receive fewer municipal services. In practice, the high property taxes affect the decisions of young couples, whether to purchase an apartment in Haifa or move to nearby cities such as Nesher, Tirat HaCarmel and the Krayot. In neighborhoods defined as Zone A, the property tax for a 120 square meter apartment can reach approximately 16,000 NIS per year, a significant amount that burdens households.
Questions without answers
When asked why this historical injustice is not being corrected, there is no clear answer. The Ministry of the Interior is not reexamining the amount of property taxes in Haifa, relative to other cities. The result is a situation in which Haifa residents pay more, but do not benefit from high-quality municipal services.
Property taxes for businesses in Haifa are based on fixed rates according to the assessment area. The municipality offers relief for certain businesses, for example, businesses on selected streets (Appendix G), businesses facing stepped streets, and artists working in studios. In addition, due to security situations, payment deferrals and additional relief have been granted in the past.
The depth of collection and its impact on the budget
Another significant parameter is the depth of collection. The more the municipality is able to collect property taxes from more residents and merchants, the larger its budget and the more services it can provide. However, when some merchants have difficulty paying, this affects the municipality's ability to provide quality services.
The municipality's response
The municipality stated that the property tax is determined by the use of the property. "The amount of property tax for businesses is determined by three components: gross area including a proportional share of common areas, the classification of the building (ground floor or other), and the classification of the assessment area. All stores in malls are classified as ground floor, but 15% of the passage areas and 10% of the parking lots are added to the charge. The Grand Canyon is in assessment area B, which is lower than area A. The law does not allow for relief for reserve servicemen."
A sense of injustice among traders
Despite the explanations, Hadar merchants feel that they are being discriminated against. They pay more, but enjoy fewer basic conditions. The feeling is one of injustice, especially when it comes to small businesses that struggle to survive in the face of tough competition in large shopping malls.
The security situation adds another layer to the discussion. Shopkeepers in malls enjoy nearby protected spaces, while shopkeepers on the streets are forced to deal with security concerns, without a satisfactory solution. This sharpens the sense of gaps between the types of businesses in the city.
Comparison to other cities
When Haifa is compared to other cities, the gaps are even more pronounced. Tel Aviv residents pay less in property taxes, but enjoy a higher level of municipal services. Nesher and Tirat Carmel residents pay less, but receive services similar to those of Haifa. The question is why Haifa residents are required to pay more for less.
The impact of property taxes on the city
The high property tax affects not only the store owners, but also the entire city. Small businesses struggle to survive, the streets empty out, and the large commercial centers gain strength. The result is a change in the urban fabric, in which Hadar and the old streets lose their importance in favor of the malls.
Call for policy change
Hadar merchants are calling for a policy change. They are asking the municipality to reexamine the tax classifications and take into account their difficult situation. According to them, there is no reason for a store owner in a mall to pay less than a store owner on a busy street, especially when the service conditions are completely different.
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Israel Savyon was the CEO of the Grand Canyon and as deputy mayor he forcefully routed public transportation lines that would pass through his mall, intentionally created zero property taxes on indoor parking lots so that his mall would pay little property taxes, destroyed commerce in Hadar with Ofer Malls, which bought the Grand and turned it into an industrial zone in a place called Hotzout Hamifratz. Now for every little thing you have to drive 40 minutes there... They dismantled commerce in Hadar, destroyed the neighborhood when they bought dozens of apartments for cooperatives and criminal clans who fled from the center here, destroyed the Technion in Hadar, destroyed the government center in Hadar. Everything was intentional, the goal was to destroy the neighborhood so that later it would be possible to come with bulldozers to wipe it out and build nursing homes for contractors who are close to the municipality. There are nursing home developers who have taken over large parts of Hadar.
It's outrageous how the municipality simply suffocates commerce on the street. Instead of embracing and strengthening commercial Herzl Street and returning it to its glory days??????
Investing in shopping malls at the expense of Hadar harms small businesses and enriches capitalists.
More than that, it is harmful to the real city and the street – in favor of huge projects that are disconnected from the ground.
Tell that to Deputy Mayor Israel Savyon, who was the CEO of the Grand, and destroyed commerce in Haifa just to promote his mall. He even canceled Book Week in Rome and tried to get it into the Grand…
Understand the processes. There is a municipality here that dismantled Haifa for the needs of the capitalists who control it.
You are right in every word. Hadar must be returned to Hadar. The central neighborhood since Haifa existed. The mayor at the time wanted to receive money from the Shin Bet and made sure to purchase apartments for collaborators and criminal clans. They simply destroyed the city. Many left following the damage they did and still do. The municipality sees, knows, and does not respond at all to public complaints. Crime in Hadar is rising. And a large population of minorities, drug dealers, addicts, including infiltrators, who were afraid to pass through Hadar as soon as the stores were closed. The infrastructure is poor. They are trying to put a band-aid on it before the elections. The merchants in Hadar are taking the beatings from all sides. Property taxes are high and unjustified. If the municipality is driving its residents away. I would not be surprised if one day the municipality itself moves to the Gulf. So who runs the city? But 17.000000 million NIS to invest in Binyamin Park? For which community exactly. I'm afraid to be there with the children. They'll bring back the legendary pool. The only problem is that we as Jews don't enjoy it and the park. Because all the infiltrators and members of minorities are taking over the park. And dirtying it. There's no normal person in the municipality who will restore it and do something. What they're only interested in is increasing property taxes, to fatten their salaries at the expense of the residents who are struggling today. And the merchants who are struggling for their livelihood. Truly a Hiriya municipality
It's no secret that Yona is doing a favor for his friend Savyon, who was previously the CEO of the Grand, and it's also no secret that Yona doesn't care about the street shops.