Thousands of northern investors left without compensation as property values plummet

Thousands of investors in northern communities, many of them ordinary people who simply wanted to secure their future income through real estate investment, are also experiencing hardship due to the security situation, as the value of their apartments has plummeted to zero and they remain completely empty. 

A recent petition filed by attorney Elad Weisstock highlights the plight of apartment owners who invested in areas like Kiryat Shmona, only to find themselves without tenants for 10 months. 

Before the conflict erupted, many investors were drawn to the north due to developments such as the planned railway, Tel Hai College, and the emerging agro-tech industry. In recent years, investments in the area have accelerated, and apartment prices have risen accordingly. However, since October 7th, many investors have been left without any compensation.

While the state has granted housing subsidies to evacuees and urged tenants to stop paying rent, investors are left with empty apartments and ongoing mortgage commitments. The legal framework regarding compensation for those affected by wartime actions stipulates compensation for "indirect damages" such as loss of income. Nevertheless, the state has decided that apartment landlords in northern communities are not entitled to any compensation and steadfastly ignore appeals on the matter.

The absurd: If you don't have more than one apartment to invest in, you won't receive compensation from the state.

Attorney Elad Weistock, representing dozens of investors, recently filed a petition to the High Court of Justice against the Tax Compensation Fund. According to him, the state speaks in conflicting voices: on one hand, it provides subsidies to tenants and expects them to continue paying rent, but in reality, many tenants have stopped paying. On the other hand, the Tax Authority states that only those defined as "business operators," meaning owners of multiple investment properties, will be entitled to compensation. 

"Not only is this distinction baseless in law, it also blatantly disregards legal reasoning. It leaves the majority of investors without any compensation for almost a year with no foreseeable end date," explains Weisstock.

Following numerous appeals to the Tax Authority, the petition was filed as mentioned to the High Court, and Judge Groskopf instructed the state to submit its response by September 4th. Updates will follow.