Today, Minister of Finance Bezalel Smotrich signed the regulations governing collection of the Metro betterment levy, which will apply to owners of property near the stations of the Metro underground railway under construction in the Gush Dan (Greater Tel Aviv) area, and which is intended to finance the Metro project.
Under the Metro Law, a precondition for selling rights in land in areas defined in National Outline Plan 70 as impacted by the project is the payment of a levy, the size of which is derived from an appraisal of the increase in value of the land as a result of the project, as assessed by the Local Building and Planning Committee in whose jurisdiction the land is situated.
The regulations approved today state that the entity authorized to certify that the owner of the land has paid the levy will be the Israel Tax Authority. Without confirmation by the Tax Authority that the levy has been paid, the owner of the land will not be allowed to change the entry in the Land Registry (Tabu) or to obtain a building permit.
In addition, Smotrich signed off on the language of the notification that the local authority will send to the person liable to pay the levy. The Tax Authority will subsequently send notification that the levy is payable through the payments system on its website.
The increased betterment levy to finance the Metro was contained in the first part of the Metro Law passed in 2022, which came into force in 2023. It applies to plans deposited from the year in which it came into force. Collection of taxes in connection with the Metro will begin in the coming year.
An amendment passed by the Knesset last month represents an important stage along the way to construction of the Metro in the Gush Dan region, the largest ever infrastructure project in Israel. The Metro Law defines the legal framework for the project, which is planned to consist of three lines totaling 150 kilometers and to pass through 24 different local authorities, with 109 stations.
The law was passed in part in 2021 and contained four chapters. The amendment to the law adds a fifth chapter consisting of special provisions to remove obstacles to advancement of the Metro project.
The main change is a reduction in the Metro betterment levy. Many developers have argued that the betterment levy applying along the Metro route, imposed since the beginning of 2023 and amounting to 75% of the assessed increase in value, is too high, and is in practice causing a standstill in development alongside the route. After many discussions on this point, it was agreed that the rate of the betterment levy would be lowered by 15% until the end of 2030 to 60%, and would be 72% permanently thereafter.
The signing of the regulations enables the law to start to be applied, although parts of the Metro project are already at various stages of being realized, including final planning of some of the lines.
The government promised that the Metro would be opened gradually between 2032 and 2034, but Haim Glick, outgoing CEO of NTA Metropolitan Mass Transit System, which is responsible for carrying out the project, recently estimated that it would not be operational before 2040.
Published by Globes, Israel business news - en.globes.co.il - on August 18, 2025.
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