Analysis Finds High-Tech Tax Discounts Need Not Cut Municipal Revenue

An analysis by the Geocartography Institute finds that reduced municipal property-tax rates for high-tech and software businesses do not necessarily mean lower business-tax receipts. The comparison, reported on November 6, examines Israeli cities with different tariffs and amounts of commercial floor space. It describes existing arrangements rather than a newly approved tax change. The institute said there is "no simple relationship" between the discount and municipal income. Its comparison puts Tel Aviv's annual high-tech tariff at about NIS 196 per square meter in 2024, against NIS 308–450 for ordinary offices. Businesses accounted for 63.9% of the city's property-tax income, alongside 16.6 square meters of business space per resident. Herzliya's high-tech rates were NIS 146–159 per square meter, compared with NIS 250–350 for ordinary offices; businesses contributed 47.9% of property-tax receipts. In Karmiel's science park, the corresponding rates were about NIS 52 and NIS 250–255. Businesses accounted for 51.6% of Karmiel's property-tax income, and business space totaled 17.1 square meters per resident. The comparison also lists high-tech rates of NIS 100–151 in Modi'in-Maccabim-Re'ut and NIS 60–66 in Be'er Sheva's high-tech park. The institute's interpretation is that demand and occupied floor space matter alongside the tariff: a lower rate can help attract business activity where the alternative is an empty building.