In the latest impasse between the Christian community in Jerusalem and the Israeli authorities, the issue of taxing church-owned properties has loomed again and threatens to set off a major diplomatic dispute.

In a joint letter issued June 23, 2024, church leaders petitioned Israeli Prime Minister Benjamin Netanyahu to order Jerusalem and three other municipalities (Tel Aviv, Ramla, and Nazareth) not to impose arnona on church properties, a move they describe as a “coordinated attack” on local Christians.1 The letter was signed by representatives of the Roman Catholic, Anglican Episcopal, Lutheran, Greek Orthodox, Armenian Orthodox, and other churches, including Cardinal Pierbattista Pizzaballa, Latin Catholic Patriarch of Jerusalem, and Franciscan Father Francesco Patton, Custos of the Holy Land (see BOX).

Several municipalities have already initiated legal proceedings against the churches over alleged municipal tax debts.

Christians make up less than 2 percent of the population in Israel and the occupied Palestinian territories.2 The majority of them are Arab Catholics or Greek Orthodox or Armenian Orthodox Christians who settled in Palestine after the Armenian genocide. The US State Department claims there are about 233,000 Christians in historic Palestine.3

The dispute centers around the demand of municipalities that commercial properties owned by churches, not religious ones, should pay municipal taxes (arnona). In Jerusalem, this applies to, for example, Christian pilgrim hotels such as the Notre Dame Hotel outside the New Gate, the Casanova Hotel in the Old City, the Christian Information Center, and other church organizations. The church leaders’ letter said that in recent months, the four municipalities have all either issued warning letters or commenced legal action for alleged tax debts.

“We follow with concern this campaign against the churches and the Christian community in the Holy Land, which has reached an unprecedented level, dragging churches into legal proceedings from north to south. In response, we assert our historical and legal rights, which municipal actors are now trying to violate,” the church leaders wrote in their letter addressed to Netanyahu.

An Associated Press report dated June 23, 2024, stated that the churches, who are major landowners in historic Palestine, say they do not pay property taxes under long-standing tradition.4 Churches say their funds go to services that benefit the state, like schools, hospitals, and homes for the elderly.

The Jerusalem Municipality told the Associated Press that the churches had not submitted the necessary requests for tax exemptions over the last few years. It said that “a dialogue is taking place with the churches to collect debts for the commercial properties they own.”5

Christian leaders argued that taxing sites such as pilgrim hostels and information centers would not only infringe on religious observance in the Holy Land but also hinder their public services.

The last time the issue of taxing church property arose was in February 2018, which led to a three-day closure of the Church of the Holy Sepulchre, itself an almost unprecedented event.6

At the time, the municipality claimed millions of dollars in property taxes from hundreds of church-owned properties that it said were not houses of worship were owed to it.7 The La Croix International article noted that at that time, heads of Christian churches shut the Church of the Holy Sepulchre because of a “systematic campaign” against churches in the Holy Land:

The conflict was resolved when Israeli Prime Minister Netanyahu intervened and ordered the creation of a committee to look into the dispute. Church leaders say that no progress has since been made in the discussions with Israeli authorities.

La Croix International, a French religious publication, ran a long report on July 2, 2024, about this latest resurfacing of the disagreement. In it, the below excerpt from the church leaders’ letter was quoted:

Regarding the Jerusalem Municipality’s decision to pursue legal action, Christian church leaders said: “We declare that such a measure both undermines the sacred character of Jerusalem and jeopardizes the church’s ability to conduct its ministry in this land on behalf of its communities and the worldwide church.”10

In their most recent letter to the Israeli prime minister, church leaders said they are again appealing to Netanyahu as their “last hope” to find a “sustainable resolution,” as he had promised in 2018: “We call on you to do all that is in your power to direct these local municipalities to cancel all legal proceedings against the churches and any other collection procedures. We want you to understand that in the face of this reality, we as Christian leaders cannot sit idly by and act as if everything is fine.”11^]

After the issuing of the letter, a meeting held with the mayor of Jerusalem on July 2, 2024, produced no breakthrough. The church leaders asked the mayor to await the Israeli prime minister’s response to their letter.12

Jerusalem Story spoke to Issa Kassissieh, Palestine’s nonresident ambassador to the Holy See, who described the problem as a direct result of Israel’s policy of exclusivity based on Israel being the nation-state of the Jewish people adopted by the Knesset passed in 2018. “The West Jerusalem Municipality is led today by the major settler organizations and their mission is to ‘clean the house.’ In their eyes, those who would like to stay are living in the ‘promised land’ as visitors or strangers. Furthermore, it is their deep conviction that those who represent the local church are heretics.”13

The Palestinian diplomat said that the argument about unfair competition by the church-owned Notre Dame Guest House or the Casanova Guest House with Israeli hoteliers ignores the fact that the local church has its social institutions serving their communities. In other words, Israeli hotels and church hotels do not compete, because they serve entirely different communities.

Issa pointed out that the statistical data shows that over 85 percent of the tourists visiting the Holy Land are Christian pilgrims. He called on the Patriarchs and heads of churches to continue to insist on the historical “status quo” and to get countries that consider themselves to be guardians of the holy shrines in the Holy Land—a reference to countries like Spain, Belgium Italy, France, and the United Kingdom—to intervene.

By way of comparison, Issa urged an in-depth reading of the 2015 bilateral comprehensive agreement between the State of Palestine and the Holy See.14 “The Palestinian side exempted the church from taxation and customs to strengthen its very presence,” he noted.

In a statement issued June 27 by Ramzi Khouri, a member of the Palestine Liberation Organization (PLO) Executive Committee and head of the Higher Presidential Committee for Church Affairs in Palestine, “The committee reaffirmed the principled and courageous position of Church leaders in rejecting and confronting these illegal measures. Such measures deliberately target the Churches, their communities, institutions, and property as a way of maintaining exclusivity and Jewish control. This is part of the further escalation in Israel’s policies to isolate Jerusalem by a cruel military occupation. These dangerous developments are the outcome of Israel’s official policies that blatantly discriminate against both Christian and Muslim Palestinians.”15 

Bernard Sabella, an elected member of the Palestinian Legislative Council for Jerusalem, told Jerusalem Story that Israel and the Vatican agreed to postpone the municipal tax issue as well as other outstanding financial issues to further discussion in specialized groups. He said that the specialized Israel-Vatican groups “did not finish their work” as issues are still pending.16

Bernard put the problem in political rather than financial terms. “The right wing in Israel, while supported by Christian Zionists, are not particularly fond of churches, and they want them and their activities curtailed. One of the signs of right-wing impunity is the way the Yeshiva students and their rabbi teachers have been seen spitting at Christian clergy and pilgrims [in the city] besides desecrating Christian cemeteries and churches. Churches do not feel equal in the treatment they receive as compared to the Jewish religious groups and the magnanimous financial support given to these groups by the State of Israel.”

Wadie Abu Nassar, the Haifa-based coordinator of the Forum for Christians in the Holy Land, noted that the problem between Israel and the churches dates back decades and must be dealt with according to the status quo agreement, which requires those in power to respect the status quo existing for centuries in the Holy Land. Wadie told Jerusalem Story that such problems can’t be resolved by arbitrary unilateral Israeli actions. “In 1993, the Vatican and Israel agreed to resolve this problem within two years, but have failed to do so since.”17

Wadie conceded that the issue is emanating from municipalities other than Jerusalem and complained that the Israeli government “has turned a blind eye to the constant attacks on clergy and churches, is constantly hesitating on visa requests for clergy, and is oblivious to the fact that church-owned schools and other institutions are providing public service to the local community, thus relieving Israel from this financial burden.”

As not-for-profit institutions, any revenue their organizations generate that exceeds expenses goes to help the local community—in this case local Christians, whom the Israeli government generally ignores and discriminates against.

Wadie urged examination of the context of the problem and said that the conflict will be resolved when all these issues are considered.