Jerusalem seeks end to tax breaks on church-owned properties

City council says exemptions wrongly given to commercial real estate owned by Christian institutions

Illustrative: A view over Gethsemane and the Church of Mary Magdalene in Jerusalem. (Sebi Berens/Flash90)
Illustrative: A view over Gethsemane and the Church of Mary Magdalene in Jerusalem. (Sebi Berens/Flash90)

Jerusalem’s city council has launched a fresh bid to end what it says are huge property tax exemptions wrongly given to church-owned properties in the city.

A council letter seen Friday by AFP said international agreements only exempt places of worship, but for years churches have been excused charges on their huge commercial property portfolios.

Municipality Director General Amnon Merhav wrote that debts on 887 properties stood at 657,180,520 shekels (over $190 million), without specifying the timeframe that covered.

The letter was addressed to the office of Prime Minister Benjamin Netanyahu, as well as the finance, foreign and interior ministries.

It also said that the tax-free status enjoyed by several United Nations agencies with offices in the city was worth around NIS 93 million.

The letter cited a legal opinion by an Israeli international law professor that the exemption for churches applied only to properties used “for prayer, for the teaching of religion or for needs arising from that.”

The Israel Hayom newspaper reported Friday that the religious institution with the biggest tax bill was the Roman Catholic Church, owing nearly NIS 12 million.

It was followed by the Anglicans, Armenians and Greek Orthodox.

The Vatican owns the imposing Notre Dame of Jerusalem hotel, restaurant and conference complex facing the walls of Jerusalem’s Old City.

Negotiations with Israel over the status of its Jerusalem holdings have been going on since the establishment of diplomatic relations in 1993.

The Greek Orthodox Church owns residential and commercial property in both West Jerusalem and East Jerusalem.

It is under fire from Palestinians for allegedly allowing controversial sales of its property in East Jerusalem to groups aiding Jewish settlement there.

The Haaretz daily reported in October that the Greek Orthodox Church was also selling off vast swaths of real estate in west Jerusalem and across Israel.

“In recent years the patriarchate has been quietly selling off its properties in various parts of the country to companies hidden in tax shelters, for sums so low one wonders whether the church is trying to get rid of its assets at any cost,” it wrote.

AFP was not able to contact church officials, while the United Nations declined to comment.

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