High-tech companies pay lower property taxes - but bring in a lot of money for municipalities

An analysis by the Geocartography Institute shows that reduced property tax rates for high-tech companies do not harm municipal revenues, as high demand and the volume of occupied space compensate for the discount. In Tel Aviv, for example, the rate for high-tech is significantly lower than the standard, yet the city generates 63.9% of its property tax revenue from businesses.

An analysis by the Geocartography Institute reveals that reduced property tax rates for high-tech companies and software houses do not necessarily harm municipal revenues. In Tel Aviv, for instance, the rate for high-tech stands at about 196 shekels per square meter compared to 308-450 shekels per square meter at the standard rate, yet the city generates 63.9% of its property tax revenue from businesses, thanks to the high volume of activity and demand. Similar data are presented for Herzliya, Ramat Gan, Karmiel, Modi'in, Haifa, Be'er Sheva, and Ashkelon. The main conclusion is that there is no simple relationship between the size of the benefit and revenue: cities can charge less per square meter to attract more occupied square meters, and the real test is whether the addition in area and occupancy compensates for the low rate.