Property Tax Discounts Announced for Earners of Up to 5000 NIS
The discount is the Interior Ministry’s Incentive for employees who had lost their property tax discounts because they earned the minimum wage.
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The Ministry of the Interior announced this week a new property tax discount level of up to 20% for a person who earns 5,000 NIS or less. (See the adjoining table.)
Until now, a person was eligible for a property tax discount only if he earned 3,700 NIS per month and received guaranteed income from Bituach Leumi.
This change is expected to be significant for many families who make close to the minimum wage and because of that were not eligible for a property tax discount despite living in poverty. The new discount incentivizes them to continue working by ensuring they will not lose their property tax discount because they are working.
In addition, the new table shows an increase in property tax discounts for families who earn well above the minimum wage, but also live at the poverty line because of their family size.
For example, a family of nine who earns 21,730 NIS gross will receive a discount of up to 30% in municipal taxes. A family of eight who earns NIS 19,364 will receive a similar discount. These discounts can accumulate to hundreds of shekels of saving a year.
According to Interior Ministry Director-General Mordechai Cohen, instituting the new discount level is part of Interior Minister Aryeh Deri’s policy to reduce poverty: "Giving the discount will encourage those making a low income to continue working because they won’t lose their discount".
"The minimum wage is a poverty wage, so we have to help those who go out to work and are barely eking out a living," he said, adding that the discount for those making a minimum wage is in addition to other assistance in the hundreds of millions of shekels which the Ministry of the Interior gives to less robust municipalities, money that ultimately reaches the residents.
Several municipalities quickly adopted the new discount levels to help families in need. The Petach Tikva municipality gave instructions to its clerks to act according to the new levels. The deputy mayor of Bnei Brak published the new discount levels as a service to its residents.
It should be noted that these municipal tax reductions are not obligatory and are subject to the discretion of each municipality. Each authority can choose whether to be more lenient and adopt the discount levels suggested by the Ministry of the Interior, be more stringent and not adopt them, or even give discounts beyond what the Interior Ministry suggests.
With the high rise in living and housing costs over the past several years, many families with wage-earners have been plunged into poverty. Israeli Shortcut views the new discounts initiated by the Interior Ministry as vital and timely, and hopes that the other municipalities will quickly move to adopt them.