Key Takeaways
- Arnona is set independently by each Israeli municipality, governed by the Municipalities Ordinance.
- Calculated as apartment area (square meters) times per-square-meter rate. Rates vary by city, zone, and property classification (residential, commercial, holiday).
- Owners are liable for Arnona regardless of whether they occupy the apartment. A vacant apartment still owes Arnona to the city.
- Foreign owners with apartments rented out can typically transfer the Arnona obligation to the tenant by contract, but the property remains the city's first lien if the tenant fails to pay.
Short Answer
Arnona is Israel's annual municipal property tax. Every Israeli apartment owner pays Arnona to the city based on apartment size and zone. Foreign owners are fully liable, even when the apartment sits vacant. Typical 2026 ranges: $1,500 to $4,000 USD per year for a luxury Tel Aviv apartment, $1,200 to $2,500 USD in Jerusalem residential neighborhoods, lower in Netanya and Bat Yam. Arnona is paid in two semi-annual installments and is the city's first lien on the property if unpaid.
Full Definition
Arnona is established under the Municipalities Ordinance (Pkudat HaIryot) and is administered independently by each Israeli local authority. The calculation methodology is uniform in form: apartment area in square meters multiplied by a per-square-meter rate. The per-square-meter rate varies by city (Tel Aviv is among the highest, peripheral municipalities lower), by zone within each city (downtown and beachfront higher, suburban lower), and by property classification (residential, holiday-rental, commercial, vacant). Israeli law treats Arnona as the occupier's liability when occupied (so a tenant pays during a tenancy) and the owner's liability when vacant. In practice, Arnona obligations are routinely shifted by contract from owner to tenant; the city retains a first lien on the property regardless, so unpaid Arnona attaches to the property and surfaces at sale through the seller's Heshbon Final tax-clearance certificate. Foreign owners renting out their apartments commonly require tenant payment of Arnona, but should require evidence of payment to avoid surprise tax-clearance issues at later sale.
Why It Matters for Foreign Buyers
Foreign buyers should budget Arnona as an ongoing cost-of-ownership line item and factor it into rental-yield analysis. Three practical points. First, verify the apartment's current Arnona rate before signing the purchase contract; the Heshbon Final the seller provides at Tabu registration will surface any unpaid Arnona, but a forward-looking calculation also matters for ownership budget. Second, foreign owners renting out their apartments should require tenants to pay Arnona by contract and document the payment monthly to avoid arrears that become the owner's problem at sale. Third, foreign owners leaving an apartment vacant between visits should be prepared for the city's vacant-property classification, which can carry meaningfully higher rates than tenant-occupied classification. Some municipalities (Tel Aviv among them) levy enhanced Arnona on vacant apartments as a deliberate policy to discourage non-resident absentee ownership; the rates can run 30 to 50 percent higher than occupied rates and meaningfully impact pied-à-terre economics.
Related Reading
Sources and References
Reviewed by Hershtik & Adoram, May 2026. This glossary entry is informational and does not constitute legal or tax advice for any specific transaction. Israeli real estate law evolves; verify current rules with qualified Israeli counsel before relying on any specific figure or rule.