Reservists lose municipal-tax discounts after wartime protection expires, petition says

Low-income reservists who spent months in IDF reserve service are losing municipal property-tax discounts because their reserve payments push them above income limits, according to a petition Jerusalem’s Hitorerut movement says it submitted to the High Court of Justice on Tuesday.

The movement is seeking to restore a protection that expired at the end of 2025, leaving some students facing full property-tax (arnona) bills after previously receiving discounts of 80%. It argues that the government failed to renew the arrangement despite advance warnings and assurances that it would continue.

One case concerns a Hebrew University medical student who served 425 reserve days from the outbreak of the war through August 6, 2026, including 118 days in 2025. According to the petition, he received an 80% arnona discount in 2025 but was billed the full NIS 5,705.45 for 2026.

His wages from work in October 2025 amounted to just NIS 788, the petition says. Reserve payments and related supplements nevertheless helped bring his recorded annual income to approximately NIS 73,977, averaging NIS 6,165 a month - above the NIS 5,857 ceiling for a single-person household to qualify for an income-based discount in 2026.

Hitorerut argues that the payments did not reflect a lasting improvement in his earnings. After returning to his limited part-time work alongside his medical studies, he faced a full year’s municipal tax without the relief he previously received.

'Reservists should not have to fight twice'

“Reservists should not have to fight twice - once at the front and once against the bureaucracy,” Jerusalem Deputy Mayor and Hitorerut chairman Adir Schwartz said in a statement accompanying the petition.

The dispute concerns income-based discounts, rather than the separate arnona discount available to active reservists. Eligibility depends on household income and size, with national regulations setting the maximum discounts municipalities may grant.

Ordinary reserve compensation counts as income under those rules. For students and other low-paid workers, the minimum payment for military service can substantially exceed their usual wages. Months of service can therefore push them into a lower discount bracket or beyond eligibility altogether.

A temporary regulation allowed municipal councils to exclude those payments when assessing discounts for 2024 and 2025. Jerusalem adopted the arrangement. Hitorerut says its expiration left municipalities without authority to continue excluding the payments in 2026.

The filing describes two further cases. A married reservist and his wife saw their discount fall from 80% in 2025 to 20% in 2026, according to the petition. Another medical student, whose ordinary monthly wages were approximately NIS 2,600-3,000, received a full annual bill of roughly NIS 5,878 after previously receiving an 80% discount.

The movement argues that the result is unequal treatment of students earning comparable wages: those who did not serve can retain their discounts, while reservists lose relief because their previous year’s military compensation is counted against them.

Hitorerut, represented by attorney Matan Gutman, first petitioned over the issue in June 2024. The temporary regulation was published that November.

Extension requested, asks for overpayments to be refunded

In January 2025, the High Court closed that case and awarded the movement NIS 15,000 in costs. Justice Yechiel Kasher found that bringing the petition had been justified from Hitorerut’s perspective and appeared to have contributed to the amendment. He expressly avoided deciding whether the petition would have succeeded had it proceeded to a final ruling.

Schwartz requested an extension in September 2025. Hitorerut says the then-acting interior minister’s office subsequently conveyed approval, but the necessary regulation was never issued. The petition says further demands in August and September 2026 produced only an acknowledgment from the Interior Ministry, with no substantive response from the government offices approached.

A separate change has compounded the problem: An Interior Ministry notice attached to the petition confirms that 2026 eligibility is calculated using average income over 12 months. Applicants can no longer rely on the previous year’s final three months, an option that could help reservists whose service payments fell outside that period.

The movement seeks to restore the exclusion for 2026–2027, retroactive to January 1, 2026, or establish an alternative protecting affected reservists. It also asks for eligibility to be recalculated and overpayments refunded once an arrangement is adopted.

With Jerusalem’s October 31 deadline for discount applications approaching, Hitorerut is also seeking an extension so reservists do not lose the opportunity to apply while the issue remains unresolved. It further asks the government to consider a standing arrangement while emergency reserve call-ups continue.