The Arab residents' outcry against continued land plunder

By: Jihan Haider Hasan

In December 2025, the Ministry of Finance published the economic plan for 2026, which includes, among other things, the reinstatement of a property tax that was abolished 25 years ago. This is a tax on land that was not used for construction - one of the most significant steps in the new economic plan that is expected to affect land

The new law states that, according to the 2026 economic plan, a property tax of 1.5% will be imposed on vacant land, including land that constitutes business inventory. The definition of "vacant land" includes: land that has no building height, land that is not used for an agricultural business, and land that is built on less than 10% of the approved building rights. While in the past the tax was presented as encouraging construction and increasing the supply of apartments, this time the justification given to the law was different and it was explained as a tax intended primarily to increase state revenue. The explanatory notes to the plan state that due to the "Iron Swords" war, an acute fiscal need was created to finance defense and reconstruction expenses, and therefore the tax base must be expanded. The principles intended to justify the law were:

• Land is an asset that cannot be hidden or smuggled, so tax collection is efficient.

• The increase in land value stems mainly from public investments in infrastructure and planning, so the tax returns part of this value to the public.

• The tax is considered neutral and does not harm the incentive for work and entrepreneurship, unlike raising the income tax.

• The tax can reduce inequality, because land is concentrated in the hands of a few.

The tax was repealed in 2000 as a result of public pressure, including from Arab MKs, because the tax on unused land caused households to feel that money was being taken from them without receiving anything in return. This was important in the public debate on its repeal. Also, Arabs have difficulty obtaining building permits, and therefore their land remains unused against their will, and they suffer much more from the law than Jews, because they almost always have to pay the tax through no fault of their own. This year, the Ministry of Finance is interested in reducing some of the burden on salaried workers and finding other taxes on wealth and assets. The Ministry of Finance is also interested in encouraging the sale of apartments, and ownership of unused land can motivate landowners to implement building plans and sell, which adds supply to the housing market. As mentioned, this effect can be positive for Jews, but the Arabs want to utilize the land and the state does not allow them to, so it is not their choice and they will pay tax for what is imposed on them.

This tax has additional harms, the tax harms entrepreneurs and small businesses because imposing a tax on unused land can harm small ventures and make projects more expensive. Also, the tax can increase the price of apartments, because if land ownership becomes more expensive, some of the costs can be passed on to buyers, and this can affect the price of apartments. Also, now the idea is not focused on encouraging construction as in the past, but mainly as a tax to cover security expenses.

The Arabs are the population primarily affected by the law because for them land is not only an economic asset but also a political symbol and a symbol of identity because from 1948 until the 1970s, extensive land was expropriated from them, there was a special expropriation through the Absentee Property Law and the Land Acquisition Law. Therefore, the tax is perceived by them as a punishment for holding the land, designed to make them transfer the land to Jews or to the state. Therefore, the return of the property tax is perceived by Arabs not as a "neutral" tax but as a way to revive the mechanisms of historical injustice. And from a political point of view, the tax is perceived as a continuation of a discriminatory land policy, even if it is presented as technical.

Likewise, the damage to ownership in Arab society is not symmetrical, because the Arab sector has a unique characteristic of a high rate of inherited land, land not regulated in the land registry, and multiple owners due to large families that include siblings, cousins, and clans. In this situation, the meaning of the property tax is to require registration and payment of an assessment for it, creating a debt when there is no practical ability to build or sell, which is common in the Arab sector, due to the state's prevention of building permits. This is because for years the state has prevented outline plans, building permits, and planning regulation. Therefore, the Arabs can rightly claim that the state is imposing a tax on land that the state does not allow them to use. This is a strong political argument that undermines the legitimacy of the law.

As mentioned, the law could accelerate the loss of land, and there is a clear political concern that the property tax will create debts, foreclosures, forced sales, and that those who will purchase the land will be Jewish entrepreneurs, the state, and financially powerful entities. This creates a political narrative of an economic tax that leads to the dilution of land reserves for Arabs. In this context, land is seen as the last resource for preserving communal existence, and any threat to it immediately becomes a national question, not just a social one.

For these reasons, the Arab sector cannot believe in the good intentions of the government institutions that have been discriminating against it for years, especially on the issue of land, and therefore their opposition is not only to the law itself but also to whoever initiates it, which in this case is Finance Minister Smotrich, who is known for his racist views against the Arabs. In addition, past experience has proven selective enforcement, discrimination in planning, and onerous fines and burdensome bureaucracy. Therefore, the Arabs have a justified fear that the tax will be enforced more severely in Arab localities, while Jews will find exemptions, deferrals, and arrangements. This translates politically into a principled opposition to expanding the state's powers in the land sector.

The law also harms local Arab leadership and municipal politics, because in Arab municipalities, land is a power base for families, a mechanism for distributing resources, and an internal political tool. Therefore, the property tax brings the tax authority into local relationships, undermines traditional social arrangements, and creates pressure on local leaders to deal with public anger. Therefore, Arab local leaders also tend to oppose the law or demand exceptions for fear of harming their legitimacy.

This is part of a broader struggle for equal citizenship for Arabs, because on a political-principled level, the resistance is integrated into a broader claim that the state does not invest enough in infrastructure and Arab communities, does not regulate planning and does not allocate land for development, and after all this imposes a tax on "frozen" assets, which, from the perspective of the Arab public, is contrary to the basic principle of civic duties without full civic rights.

For all these justified reasons of unfairness in the law in general and towards the Arabs in particular, we call on the general public and members of the Knesset, with an emphasis on the Arab and Druze MKs such as Akram Hasson and Afif Abed, and also the Haredi MKs who benefit from votes from the Arab sector in the elections, to stop the madness and rapacity of Smotrich in general and the law in particular, to oppose the law.

The reinstatement of the law presented by Smotrich as a condition for approving the budget must be prevented. The clause imposing a 1.5% tax on land must be immediately deleted from the budget and the economic plan for 2026 and in general.

The Arabs, the Druze, and the secular and religious public will not forgive MKs who support the law. Both the Arab MKs and the ultra-Orthodox MKs will pay a heavy political price for supporting such a law.

We appeal to the members of the Knesset with every word of request: Vote against the law!

We ask citizens to put pressure on elected officials to oppose the law!!!.