This is a fundamental issue that has broad implications for many residents, which deals with attempts to collect municipality taxes regarding the addition of building rights according to detailed plans for National Outline Plan 38, which according to the law in Israel grants an exemption from municipality taxes
On the edge of the fork - as part of the country's overall preparedness against earthquakes, a government decision was made in 2005, which approved the national outline plan 38, the purpose of which was to determine planning, financial and other arrangements, to strengthen and improve existing buildings against the danger of earthquakes
In order to encourage entrepreneurs to strengthen the buildings and for the purpose of financing the high cost of strengthening that is expected of them, it was determined that TMA 38 will allow the addition of construction rights, for example closing a column floor, expanding typical floors and adding floors to the building
In a government decision of the ministerial committee regarding preparation for handling earthquakes, the recommendations of the committee headed by the director general of the Ministry of National Infrastructures were accepted, among them, the granting of a full exemption from the obligation to pay municipality taxes for the exercise of building rights in accordance with TMA 38
Since then, the law that provides for relief in municipality taxes has been amended several times. Initially, a partial exemption was established as a temporary measure, and in the end, a full exemption from the payment of the improvement levy was established due to the exercise of building rights according to TAMA 38
TMA 38 has been amended 4 times since it was approved. Before the last amendment, the local authorities protested against the plan. As part of the protest, the heads of the authorities claimed that as part of the amendment, the developers and apartment owners are enriching their pockets at the expense of all the residents of the city
Following this, a forum of the 15 local authorities submitted a petition to Bagetz, in which they sought to cancel the exemption from municipality taxes which, according to their method, imposes a financial burden on the local authority. The petition was rejected
As part of a late amendment to the law, the authorities reached a legislative settlement according to which municipality taxes will apply to the part of the improvement that originates from the addition of construction areas beyond the typical 2.5 floors
This was supposed to end the discussion on the issue of collecting the improvement levy for building rights originating in TMA 38. In practice, the Tel Aviv Local Planning and Building Committee promoted an alternative way to collect municipality taxes by approving a detailed plan according to section 23 of TMA 38 (a lower level plan created by 10 TMA 38 - contradicts the fundamental rule in planning and construction law 'hierarchy between plans' according to which a lower level plan is subordinate to the plan above it)
And since the wording of the law provides for a full exemption in the exercise of building rights by obtaining a building permit (this is the only way to exercise rights according to the national outline plan 38) then the committee will ask to collect municipality taxes in the exercise of the rights by way of selling the apartment to another. This creates a situation where the resident of the city who sells the residential apartment is worth He did not pay due to the approval of the plan and was required to pay hundreds of thousands of shekels out of his own pocket
The absurd situation that resulted resulted in the opening of thousands of appeal procedures before the Tel Aviv District Planning and Construction Appeals Committee. Today, about 4 years later, there is still no final decision on the issue, which leaves many residents confused and frustrated by the fact that they may have to pay a high levy in the future
The chairman of the District Appeal Committee for Planning and Construction of Tel Aviv Mrs. Silvia Ravid recently ruled regarding District 3 in the city, that the exemption from municipality taxes does not apply in the event of a sale (in my opinion, a wrong decision). On the other hand, the chairman of the District Appeal Committee for Planning and Construction of Jerusalem headed by Binyamin Zalmanovitz ruled the opposite regarding the same plan in the Rehavia neighborhood in the city of Jerusalem
Against this decision, an administrative appeal was filed, which was partially accepted on January 8, 2024 by the Honorable Judge Yaakov Shaked, who stated that an increase in value due to the effect of TAMA 38 must be examined and taken into account when determining the 'previous situation'. In this way, all the assessments of the Tel Aviv Local Planning and Construction Committee that were conducted in the Districts 3-4 plan, which completely ignored the effect of TMA 38 in the 'previous situation', were canceled.
This is a decision that will partially correct the injustice that the respondent is trying to inflict on the residents. Against this decision, the local committee filed an appeal to the Supreme Court
The Chamber of Commerce frequently deals with legal matters from the world of planning and construction and represents many residents in the aforementioned issue
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