Municipal tax set to be tripled on Airbnbs in Tel Aviv

Israel: The Tel Aviv Municipal Council has proposed to triple the city’s municipal tax on apartments rented for over three months via Airbnb.

According to Israel’s Channel 10, the proposal on the tax, known as arnona, was put forth after a rise in the number of apartments being used as long-term Airbnb rentals in the city. As a result, large sections of certain neighbourhoods have been essentially stripped of permanent residents.

The municipality believes that damages housing prices and the rental market, in addition to hotels, which are required to pay VAT, and other taxes that Airbnb rentals are not, which places them at a disadvantage.

Municipal property taxes are typically collected on a bimonthly basis and the responsibility for taking on these taxes rests with whoever is residing in an apartment, such as renters and homeowners.

Airbnb has been the source of controversy in Israel since last year when it chose to drop listings in the West Bank settlements, prompting suggestions that the company was endorsing the anti-Israel BDS movement in Palestine.

The company has since confirmed it is involved in an ongoing dialogue with the Israeli government and said it would not delist settlement offerings as long as those discussions were continuing.

In a statement, the city said that a sharp rise in the number of apartments rented on Airbnb has lowered the quality of life of residents in Tel Aviv and resulted in an increase in rent levels.

According to one anonymous source who spoke to Calcalist, the potential tax hike would not be enacted until the second half of 2019 at the earliest.

In the meantime, Tel Aviv is expecting droves of tourists to descend on the city in May when it hosts the annual Eurovision Song Contest, and many residents are preparing to list their apartments on Airbnb around that time.

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