Tax Break Approved for Threatened Judea and Samaria Communities
The law creates tax benefits for communities in what it defines as an “eastern confrontation line area” in Judea and Samaria. The measure applies to communities located east of a designated security fence, where some or all residential homes are more than two kilometers from the fence by air distance.
The Knesset approved a new law that will grant income tax benefits to residents of certain Judea and Samaria communities defined as facing elevated security threats.
The bill, advanced by MKs Zvi Sukkot, Limor Son Har-Melech and a group of additional lawmakers, passed its second and third readings with 32 MKs voting in favor and 23 opposed.
The law creates tax benefits for communities in what it defines as an “eastern confrontation line area” in Judea and Samaria. The measure applies to communities located east of a designated security fence, where some or all residential homes are more than two kilometers from the fence by air distance.
To qualify as a beneficiary community, a town must meet several conditions as of December 31 before the relevant tax year. Transportation of schoolchildren to and from the community must be permitted only in armored vehicles, according to Defense Ministry publications. The community must also be ranked 6 or lower on the peripherality index and 6 or lower on the socioeconomic scale, and its establishment must have been legally approved.
Residents who live in such a community for the entire tax year will be eligible for an income tax credit, according to the rate and ceiling set in the Income Tax Ordinance. If a resident is eligible for more than one tax credit, the law allows them to choose which one to use.
The law will apply retroactively from January 2026 and remain in effect until December 31, 2027. The finance minister may extend it, with approval from the Knesset Finance Committee, for additional periods of up to two years each.
The explanatory notes to the bill state that security-threatened communities in Judea and Samaria are already included in Israel’s national priority map under a 2013 government decision, but that the security threat criterion had not previously been considered for income tax benefits.
Supporters of the law argue that residents of these communities face daily security restrictions and risks that should be reflected in state policy, particularly when families are required to rely on armored transportation for children.