Arnona 2026: property tax costs by city

Everything you need to know about the Arnona, Israel's municipal tax, and its impact on your investment.

What is the Arnona?

The Arnona is Israel's municipal tax, equivalent to a combined property and council tax. It's paid by the owner-occupier or tenant, funding municipal services: waste collection, street lighting, public spaces, social services. Its amount is set by each municipality and varies considerably. Understanding the Arnona is essential for any property investor wanting to calculate their true net yield.

2026 rates by city (residential)

The rates below are indicative for a standard residential apartment. They may vary by exact neighborhood and property classification. For a precise estimate of your charges, use our tax simulator.

Exemptions and reductions

Several population categories benefit from Arnona reductions: olim hadashim (new immigrants) for the first 12 months, elderly, disabled, large families, and welfare recipients. Unoccupied properties can get a 100% reduction for the first 6 months if the owner requests it from city hall. For from abroad investors, this provision is valuable during the period between purchase and rental.

Impact on your profitability

Arnona represents a significant cost in your net rental yield calculation. In Tel Aviv, it can absorb 10-15% of gross rent, while in Beer-Sheva or Eilat, it only represents 5-8%. In most Israeli leases, Arnona is the tenant's responsibility, but this isn't universal and depends on lease negotiation. It's recommended to clearly stipulate in the rental contract that Arnona is the tenant's charge. To optimize your real estate taxation, factor this cost in from the property selection phase.

How arnona is calculated: the per-square-meter method

The arnona tax in Israel is a municipal property tax charged per square meter of so-called "taxable area" (see also our guide on [real estate taxation in Israel](/blog/fiscalite-immobiliere-israel)). Contrary to what many assume, this is not just the living space: the municipality adds wall thickness, balconies (counted at 50% when covered) and, in some cities, outdoor storage rooms. Each municipality publishes its own per-m² rate schedule, revised every year, with different rates for residential, commercial and industrial zones. Understanding how your city measures is the first step to checking your bill.

In practice, an 80 m² apartment in Tel Aviv costs around ₪6,500 per year in 2026 (an average rate of roughly ₪80/m² in central neighborhoods), compared with barely ₪4,800 in Haifa for the same surface. The gap comes from municipal rates and from measurement methods: Tel Aviv systematically includes walls, while other cities are more lenient. Before signing a lease or a purchase contract, always ask for the property's current arnona bill — it is the only reliable figure.

Arnona exemptions and discounts in 2026: who pays less

In 2026, several groups qualify for arnona discounts in Israel. New immigrants (olim) can receive up to a 90% reduction during their first year after aliyah. Soldiers, low-income retirees, large families and welfare recipients may obtain discounts of 20% to 80% depending on their situation. Vacant homes or properties under renovation can also be temporarily exempted, with supporting documents. For other tax mechanisms, see our guide to [real estate taxation in Israel](/fiscalite-immobilier-israel).

### How to apply Discount applications are filed with the municipality's arnona department, using a dedicated form plus supporting documents: teudat zehut, oleh certificate for new immigrants, payslips or bank statements for modest incomes. Processing times range from a few weeks to three months depending on the city; file as soon as you receive your first bill, ideally before moving in. The discount applies from the eligibility date, but retroactive refunds are not guaranteed — do not wait.

Paying your arnona: the 3 methods

Taxpayers have three options. Paying online on the municipality's website is the simplest: you only need the bill number (often called a "shovar"). Monthly direct debit (horaat keva) spreads the cost without thinking about it. Finally, payment in six bi-monthly installments, provided by law, splits the annual bill at no extra charge. Each method is available to owners and tenants alike, depending on who is liable.

Good to know: most municipalities offer roughly a 2% discount for paying the full year in advance, before the early-year deadline (usually end of January). On a ₪6,000 arnona bill, that is ₪120 saved — a modest sum, but money kept in your pocket. Cities send a reminder each January; if you move during the year, make sure your change of address is registered so you do not miss the deadline.

Arnona for investors: the real budget

For an investor, arnona is a cost to factor into yield calculations, even though it is usually passed on to the tenant. A 70 m² apartment rented at ₪4,500/month in Jerusalem carries an arnona of about ₪5,200/year — nearly a full month's rent. If the property sits vacant between tenants, the owner pays: a few months of vacancy can cost ₪1,500 to ₪2,000 in unrecovered arnona. To refine your projections, read our analysis of [rental investment in Israel](/blog/investissement-locatif-israel).

### Owner or tenant: who pays? Israeli law is clear: when the property is rented under a written lease of at least one year, the arnona is owed by the occupying tenant. Without a written lease, or for short-term rentals, the municipality bills the registered owner. In practice, the lease must therefore explicitly transfer the arnona to the tenant. Investors comparing markets will find city-by-city tax differences in our comparison of [property prices across Israeli cities](/blog/prix-immobilier-israel-villes).

Frequently asked questions about arnona

Is arnona owed by the tenant or the owner?

In principle, the occupant pays. With a written lease of at least one year, the arnona is transferred to the tenant and the bill is issued in their name. Without a written lease, for short-term rentals, or if the home is vacant, the owner remains liable. The lease should therefore always state who pays the arnona to avoid disputes with the municipality.

How is the taxable surface calculated?

The municipality measures the interior surface including walls, then adds covered balconies (counted at 50%), outdoor storage rooms and sometimes common areas pro rata. Each city applies its own measurement rules, which explains surprising gaps between two identical apartments in different municipalities.

What arnona discounts apply to olim?

New immigrants can receive up to a 90% arnona discount during their first year in Israel. The application is filed with the municipality using the teudat oleh. After that period, other discounts may apply based on income, family situation or military service.

Can arnona be paid in installments?

Yes. The law provides for payment in six bi-monthly installments at no extra charge, available to all taxpayers. You can also choose monthly direct debit or pay the full year upfront with roughly a 2% early-payment discount.

What happens if arnona goes unpaid?

Unpaid bills trigger late penalties and interest, then enforcement measures: bank account seizure, wage garnishment or a lien registered on the property. The municipality can also block certain administrative procedures, such as permit renewals. If you are struggling, negotiate a payment plan with the city before the debt piles up.

Does arnona increase every year?

Generally, yes. Israel's Interior Ministry sets an automatic annual increase rate (indexed on public-sector wages and inflation), on top of which municipalities may add an exceptional hike subject to authorization. Between 2024 and 2026, most cities raised their rates by 2% to 5% per year.

Sources: Israeli Ministry of the Interior, 2026 municipal rate schedules.