< Back

Arnona, Vaad Bayit and Costs for Absentee Owners

Q: Who pays arnona when the apartment is rented?

The tenant, once the municipality has been notified in writing of the lease. Until then the owner remains liable.

Q: Can I get an arnona discount for an empty apartment?

Many municipalities offer a temporary exemption or reduction for a vacant property, subject to conditions and time limits. Apply to the specific municipality and ask about the current rules.

Q: Can the building committee force me to pay for a lift or roof repair?

Yes. Under the Land Law owners share the cost of maintaining common property in proportion to their apartments. Decisions are taken at the owners' meeting and disputes go to the Supervisor of Condominium Registration.

Monthly bills for an apartment building in Israel

An apartment in Israel generates bills whether or not anyone lives in it. The main ones are arnona, the municipal property tax; vaad bayit, the building committee fee for shared areas; utilities and standing charges; insurance; and occasional levies connected with planning or land ownership. An absentee owner needs to know what each is, who is liable for it when the apartment is rented, and how to make sure it is paid from abroad without a missed bill turning into a lien or a disconnected service.

Arnona: the municipal property tax

Arnona is charged by the local authority under its annual tax ordinance, approved under the municipal laws and the Ministry of Interior's framework. It is calculated by area, zone and use, and billed in instalments through the year. The person liable is the occupier, not necessarily the owner. When the apartment is rented, the tenant is usually liable, but only if the municipality has been notified in writing of the tenant's name and the lease period. If no notice is given, the municipality keeps billing the owner and can collect from the owner. An apartment left empty may qualify for a temporary exemption or reduction under the municipality's rules; the conditions and duration vary, so ask the specific municipality. Arnona debts attach to the property and must be cleared before the Land Registry transfer when you sell.

Vaad bayit: the building committee

In a condominium (bayit meshutaf) the Land Law 5729-1969 makes every apartment owner share the costs of maintaining the common property, in proportion to the apartment's floor area unless the building's by-laws say otherwise. The building committee collects a monthly fee for cleaning, lighting, lift maintenance, gardening and small repairs, and can levy a one-off charge for larger works such as a roof repair or lift replacement. The owner, not the tenant, is liable to the committee under the Land Law, although leases usually pass the routine monthly fee to the tenant. Larger one-off works remain the owner's cost. A committee can sue an owner who does not pay, and disputes go to the Supervisor of Condominium Registration at the Ministry of Justice.

Utilities and standing charges

Electricity: billed by the electricity company to the account holder; a tenant should open the account in their own name.
Water: billed by the local water corporation; the municipality and water corporation must be notified of tenant changes.
Gas: cooking gas is supplied by private companies with their own meters and fees.
Cable, internet and telephone: contractual with the provider; close or transfer them between tenants.
An empty apartment still carries fixed charges for electricity and water meters.

Insurance

Structure insurance protects the building fabric of your apartment; contents insurance covers what is inside; and landlord cover adds liability and loss-of-rent elements. If there is an Israeli mortgage the bank requires structure insurance in its favour. The building committee may also insure the common property, and that premium is part of the committee fee. Review the policies each year; an empty apartment may be subject to conditions on how long it can stand vacant.

Levies and taxes tied to ownership

Betterment levy (heitel hashbacha): under the Planning and Building Law 5725-1965, a local planning committee can charge an owner when a plan or permit increases the value of the property, usually collected when the owner sells or applies for the permit.
Israel Land Authority payments: if the apartment stands on state land held under a long lease, there may be lease fees or consent fees on certain transactions. Check the title extract to see whether this applies.
Land appreciation tax and purchase tax under the Real Estate Taxation Law 5723-1963 arise on sale and purchase, not annually, but they belong in a long-term budget.
Income tax on rent under the Income Tax Ordinance, if the apartment is let.

Managing it from abroad

Set up direct debits from an Israeli bank account for arnona, water and electricity, and keep the account funded.
Give the municipality and water corporation a written notice of every tenant change, and keep the acknowledgement.
Appoint a property manager or a trusted local contact to receive mail, since many bills are still posted.
Register for the municipality's online portal to see the arnona account.
Ask the building committee for its annual statement and attend, or send a proxy to, the owners' general meeting.

Common mistakes

Not telling the municipality about a tenant, so arnona debt accumulates in the owner's name.
Assuming the tenant pays the building committee's one-off repair levy.
Letting the Israeli account run dry, so direct debits bounce and services are cut.
Discovering a betterment levy only at the sale, with no budget for it.
Ignoring letters in Hebrew that turn out to be collection notices.

FAQ

Who pays arnona when the apartment is rented?