Supreme Court Classifies Public Theaters as “Other Property” for Municipal Property Tax Purposes

The Dispute Over the Theater’s Classification

The proceeding concerned the property classification used to calculate the municipal property tax—arnona. The Tel Aviv–Jaffa Municipality classified the property of the Habima National Theatre under the category “offices, services and commerce,” and the theater challenged that classification.

The Supreme Court’s Ruling

The Supreme Court granted the theater’s appeal. It held that a public theater such as Habima does not provide “services” within the meaning used in the State Economy Arrangements Regulations concerning the category “offices, services and commerce.”

Why the Residual Category Applies

The Court noted that the State Economy Arrangements Regulations do not contain a separate category appropriate for a public theater. Accordingly, such a property must be classified under the residual category “other property.” In the Court’s view, this conclusion follows both from the nature of a public theater’s activities and from the provisions and purposes of the relevant regulations.

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