Jerusalem Property Levy Dispute
The imposition of levies on both the Jewish National Fund (JNF) and the Greek Orthodox Patriarchate stems from a decision made by the Jerusalem District Planning and Building Appeals Committee. The JNF (Keren Kayemeth le-Israel) and the Greek Orthodox Church are required to pay betterment levies amounting to hundreds of millions of shekels on the Patriarchate’s land in Jerusalem. The specific amount of the levies for the JNF will be determined by an appraiser appointed by the committee. This decision aims to regulate the rate of participation of property tenants in betterment levies imposed by law on property owners.
The Greek Orthodox Patriarchate owns 520 dunams (130 acres) of land in Jerusalem, located in some of the city's most prestigious areas, including Talbieh, Rehavia, and Nayot. Much of this land is developed and includes over 100 apartments, as well as public institutions, offices, and hotels. In 2016, the land was sold to a group of investors known as Nayot, which, in 2023, transferred ownership to Extell, controlled by American Jewish real estate businessman Gary Barnett.
Over the years, various plans approved by the Jerusalem Local Planning and Construction Committee have enhanced the properties and increased their value. Since most of these plans were made when the land was still owned by the Greek Patriarchate, the Jerusalem Municipality issued several payment demands to the Patriarchate for plans, some of which were approved as long as 30 years ago.
One such plan involved a complex near the Liberty Bell Garden, which rezoned land from an open public area to a special commercial zone. For this, the Patriarchate was asked to pay a betterment levy of NIS 357,000.
"An Unusual Situation for the State of Israel"
The Patriarchate appealed against the levy through lawyers Benjamin Zalmanovich and Ariel Kamenkovich, arguing that since the land was leased in 1951 by JNF-KKL for 99 years, the levy should be imposed on JNF-KKL rather than the Patriarchate. The Jerusalem Local Planning and Construction Appeals Committee, represented by lawyers Hila Sirota and Tamar Einy, contends that the Patriarchate did benefit from the land improvements.
JNF-KKL, represented by lawyers Tamar Migdal and Avraham Yurkevich, argued that if the levies are imposed, it would be an absurd situation where those who did not benefit from the lands would be required to pay, contrary to the guiding principles of the betterment levy.
The Jerusalem Local Planning and Construction Appeals Committee, chaired by lawyer Amit Afik, responded, "The appeal reveals an unusual situation for the State of Israel, where, as is known, most land is state-owned and leased to private individuals. This irregular situation complicates the identification of the responsible party for the betterment levy."
Comment: The situation in Jerusalem is particularly unusual due to the unique history and rapid development of the city. As a relatively young state, Israel's property transactions and management practices were significantly different before the establishment of the State of Israel. Historical arrangements, such as land leases from the JNF and the Greek Orthodox Patriarchate, reflect an era when land ownership and transactions were handled in ways that differ markedly from contemporary practices.
The committee did not accept the positions of either JNF-KKL or the Patriarchate, which suggested that only the other party should bear the levy payment. Instead, it appointed an advisory appraiser to determine the appropriate improvement levy and the ratio between the value of lease rights and ownership rights.
