There is no clear way to prove that outline plan 9988 for upmarket Jerusalem neighborhood Rehavia contributes to a rise in the value of the properties in the neighborhood and so it is not possible to collect betterment levies - the appeals committee of the Jerusalem District Planning and Building Committee has ruled. The ruling is controversial because it contradicts the spirit of last month's decision by the appeals committee of the Tel Aviv District Planning and Building Committee that betterment levies should be collected in Tel Aviv's Rova 3 area when properties are sold.
Plan 9988 in Jerusalem covers 650 dunams (162.5 acres) in Jerusalem's Rehavia neighborhood and parts of the adjoining neighborhoods of Talbieh, Kiryat Shmuel and Sha'arei Hesed. The Jerusalem Municipality initiated the plan in order to preserve the character of the area and the historic buildings in it, while allowing denser construction and the addition of new buildings, while preserving the old.
The plan divides the area into three sub-districts in which rights will be granted for new construction. During the planning process, a survey was also conducted, and about 150 buildings were determined for conservation according to different categories, to preserve the character of the environment, the streets and to provide a response to traffic and parking problems.
As in Tel Aviv's Rova 3 neighborhood, the Jerusalem Municipality demanded betterment levies from homeowners in Rehavia worth hundreds of thousands of shekels. But 50 of the apartment owners, including former Supreme Court President Aharon Barak, appealed the decision to the appeals committee of the Jerusalem District Planning and Building Committee. The appeals committee examined the appraisals according to which the levies were determined, analyzed the planning situation in the location and the practical possibilities to realize the plan, and a decided that it does not improve the properties throughout the area, and therefore it is also not possible to collect betterment levies.
"Subjective working assumptions"
"It seems that the appraisals that were presented to us present many subjective working assumptions - the assessment of the future construction rights that will be approved at the end of the day in part, the assessment of the prolonged postponement resulting, as mentioned, both from the uncertainty in receiving the rights and from the uncertainty in the formation of the tenants of the jointly owned apartment building - which ultimately determines the entire improvement in the land, and unfortunately present a factual data sheet that does not reach a reasonable level of certainty indicating an 'increase in the value of the real estate' at the determining date," wrote committee chairman Adv. Binyamin Zalmanovich. The committee criticized the many appraisals presented to it and even wrote that it received no explanations as to the various amounts reached.
"In a situation where there is no explanation for the amounts set, there is no escaping the conclusion that no betterment has been proven, because at the end of the day, and perhaps at the beginning of the day, we are interested in the authority taking money from the citizen through a levy, all based on the fact that that citizen became rich from a planned action by that authority, which was defined by law as carrying with it a charge for the betterment levy. It is clear that the determination of the amount of the betterment must be made based on a solid factual database, in accordance with the exact measure of the citizen's enrichment, since without this it is not a matter of collecting a genuine tax," the committee wrote.
The decision is very significant, especially because of the appeals committee of the Tel Aviv District Planning and Building Committee on Rova 3, which ruled that, contrary to the position of many appraisers, that homeowners in the district must pay the betterment levy when selling their apartments. The appeals committee of the Jerusalem District Planning and Building Committee has now argued on the other hand that it is not possible to prove an increase in value due to the approval of the plan.
Published by Globes, Israel business news - en.globes.co.il - on September 5, 2022.
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