Court ruling8/18/2026

Court Canceled Rafael’s Demand to Pay Approximately NIS 1.2 Billion

The Haifa District Court granted the administrative petition filed by Rafael and canceled the Kiryat Yam Municipality’s demand for payment of development levies for the “David Institute” complex. The municipality may prepare a new calculation and, if there are grounds to do so, issue a corrected payment demand.

Key facts

•Court: Haifa District Court
•Parties: Rafael and the Kiryat Yam Municipality
•Payment demand: approximately NIS 1.2 billion
•Legal costs: NIS 100,000
•The petition was filed in December 2021
•The source did not state the case number or the date of the judgment

How the Dispute Arose

Rafael’s “David Institute” complex, which extends over thousands of dunams, previously had a special municipal status, and part of it was not within the jurisdiction of any local authority. Following a decision by the Minister of Interior in 2018, its land was incorporated into Kiryat Yam and Acre. In August 2021, the Kiryat Yam Municipality demanded that Rafael pay approximately NIS 1.2 billion in development levies, and in December 2021 the company filed an administrative petition.

Rafael’s Arguments

The company challenged both the underlying payment obligation and the calculation method. It argued that the municipality used a model based on densely built residential neighborhoods, even though there is no residential construction in the complex and none is planned. Rafael also argued that including the complex’s land in the denominator of the calculation would have reduced the levies by approximately NIS 807.9 million.

Why the Demand Was Canceled

The court found material defects in the calculations, which did not take into account the incorporation of the complex, its size, or its special purpose. It noted that the complex is larger than the area of the city itself, that it is not intended to be developed as a residential, commercial, or business area, and that the municipality does not plan substantial investment in its infrastructure. Defects were also found in defining the sewage area and in calculating drainage, road, and public open-space levies; some of the works did not establish grounds for requiring Rafael to pay.

What Happens Next

The municipality’s demand was canceled, and Kiryat Yam was ordered to pay Rafael NIS 100,000 in legal costs. However, the court did not prohibit future collection: the municipality may reexamine the basis for the charge and prepare a calculation that takes into account the complex’s characteristics and the infrastructure actually required. The court separately emphasized that its findings concerning the defects relate only to the demand issued to Rafael and do not concern levies imposed on other property owners in the city.

What this means for you

Canceling a large municipal payment demand does not always mean a complete exemption from payment; the local authority may issue a new demand after correcting the calculation. For owners of properties that are exceptional in size or purpose, the decision illustrates the importance of adapting the levy model to the land’s actual characteristics and the scope of municipal infrastructure. However, the court’s findings in this case were expressly limited to the demand issued to Rafael.

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